Alarm over new coffee chain invading the US and secret of $1.99 brew,
One of the world’s fastest-growing businesses could potentially send Americans’ private data to a government described as the greatest threat to US national security.
Luckin Coffee has surged to rival brewing giant Starbucks, opening more than 30,000 stores worldwide since 2017.
The vast majority are in its home country of China, but the brand has now opened 11 locations in New York City in a matter of months.
However, it is now raising eyebrows over its strict payment policy.
Even though a cup of coffee in US shops costs as little as $1.99, the chain does not accept cash and prides itself on not having any cashiers.
This means that the only way to get coffee is to download Luckin’s app, set up an account and pay digitally.
The US Department of Homeland Security (DHS) has warned that American consumers are in danger of being spied on by a government deemed actively hostile to the US, citing that Chinese law specifically states that companies like Luckin must hand over their data whenever they are requested to.
Tony Zielinski, a lawyer and Wisconsin politician for over 30 years, told the Daily Mail he fears this business tactic could be used against US consumers, uploading a ‘Trojan horse’ into the American economy.
Zielinski claimed the Luckin Coffee situation may also allow state actors to install malware through the app. There has been no evidence of the Chinese government using these laws to collect data or spread malware.
However, cyber warfare expert James Knight told the Daily Mail he was more concerned about intelligence agents potentially using the information to track and target Americans.
Chinese company Luckin Coffee has opened 11 stores in New York City as their rapid expansion grows worldwide
The coffee company has marketed itself on providing customers with a fully cashier-less experience, relying on an app for orders and not accepting cash
According to DHS, Article 7 of the People’s Republic of China’s National Intelligence Law of 2017 states that ‘a PRC intelligence agency may request that any PRC firm or entity secretly share access to a US business or individual’s data, or otherwise face penalties.’
Luckin’s most recent filing with the US Securities and Exchange Commission (SEC) acknowledged that it is required to obey China’s laws, even if customers believe this harms their privacy and a scandal hurts the coffee giant’s future business.
‘If we fail to comply with these new laws and regulations described above, we may be ordered to rectify and terminate any actions that are deemed illegal by the government authorities and become subject to fines and other government sanctions,’ Luckin warned investors.
‘Compliance with these laws and requirements in manners that are perceived as harming privacy could lead to significant damage to our reputation.’
The company also warned its investors that even typical security measures – including encrypting data – may not work against the rules.
‘Regulators in China may implement measures to ensure that encryption of users’ data does not hinder law enforcement agencies’ access to that data,’ the company said per the filing.
‘For example, according to the PRC Cybersecurity Law and relevant regulations, network operators are obligated to provide assistance and support in accordance with the law for public security and national security authorities to protect national security or assist with criminal investigations.’
Knight noted that because of what Luckin stated in the SEC filing, people using its app are putting financially sensitive data at risk, including phone numbers, email addresses, credit card details and their purchasing history and shopping patterns.
Downloading apps like this also means companies compile ‘location and behavioral data’ on Americans, including what stores they visit, GPS data and the user’s IP address.
Luckin Coffee has not replied to the Daily Mail’s request for comment on its payment and data-sharing policies, nor did it reply regarding whether it has supplied the Chinese government with US customer information.
According to Knight, one of the worst-case scenarios would be intelligence agents using data they take from Luckin to spy on and profile former Chinese citizens who have immigrated to the US.
Luckin Coffee has quickly grown to have over 30,000 locations and has overwhelmed the number of Starbucks stores in China
Pictured: Statements from Luckin Coffee’s 2025 report to the US Securities and Exchange Commission regarding compliance with China’s national intelligence laws
‘This data supports larger goals like tracking influence networks, identifying potential [espionage] recruits or monitoring dissent,’ Knight explained. ‘Even seemingly innocuous data becomes powerful when combined with China’s vast surveillance infrastructure.’
The cyber warfare expert added that even if you stop using the Luckin app, your data would still be at risk of being shared with a foreign power, claiming the information is not deleted and the Chinese government could retain it ‘as long as it serves a “legitimate” purpose.’
Luckin Coffee’s website states that US consumers have the right to delete their information from the app and that the company will remove any personal information that can be linked to those individuals from their systems.
However, Luckin did note that the private information would continue to be stored for as long as ‘required or permitted by law.’
While not addressing Luckin specifically, former FBI Director Christopher Wray previously confirmed much of what Zielinski and Knight feared regarding the Chinese government.
‘China’s laws allow its government to compel any Chinese company to provide any information it requests – including American citizens’ data,’ Wray said during a July 2020 speech.
‘On top of that, Chinese companies of any real size are legally required to have Communist Party “cells” inside them to keep them in line,’ Wray added.
Wray has repeatedly called China the ‘greatest long-term threat’ to America’s national security, economic security, innovation and critical infrastructure.
The Chinese government’s National Intelligence Law of 2017 and several other laws require Chinese businesses to share their customer data whenever requested
There has been no public evidence that Chinese-owned businesses operating in the US have been ordered to hand over US consumer data under these specific laws.
Despite that, the issue has been a continuing concern for Congress, sparking a major public debate over the ownership and control of the social media platform TikTok in 2023.
‘TikTok has never shared, or received a request to share, US user data with the Chinese government. Nor would TikTok honor such a request if one were ever made,’ TikTok CEO Shou Zi Chew declared during a 2023 congressional hearing.
Although Chew claimed the formerly China-based company would refuse such an order from the PRC, Luckin Coffee warned stockholders that the punishments from refusing any data requests ‘may materially and adversely affect our business, financial condition, and results of operations.’
Zielinski, who currently runs the nonprofit Bold Action for Freedom that exposes and counters the growing influence of authoritarian regimes, claimed that Americans lining up for inexpensive coffee were paying a hidden price with their private data.
‘I mean, $1.99 for a cup of coffee in New York, are you kidding me? Everybody’s gonna be flocking to that,’ the former city councilman in Milwaukee said. ‘But it’s a Trojan horse, because as soon as you download that app, you’ve got some problems.
‘For those people that argue, “Well, I don’t care if they get my banking information, my health information, whatever” – well, do you care if your device starts to malfunction in the future?’
Zielinski has filed a formal complaint with New York’s Consumer Affairs Office over Luckin’s refusal to comply with US laws, which prevent businesses from not accepting cash in certain situations.
Luckin Coffee (not pictured) sells its beverages for as little as $1.99, but the company has refused to take cash from customers
Tony Zielinski has filed a formal complaint against Luckin Coffee over their business practices in New York
While cashless payments may seem more convenient for many, it is still against the law in New York to force customers to only pay through an app.
As of March 21, 2026, New York’s General Business Law section 396-ii states it is illegal for retail stores and food establishments to refuse cash payment for in-store orders.
This makes ‘app-only’ or ‘cashless’ policies illegal, unless the business provides a way of converting cash into a prepaid card for customers.
Complaints online from US residents looking to pay without the app have claimed that Luckin employees said the New York law does not apply to them because ‘they are a tech company.’
‘I don’t think that’s gonna carry any water whatsoever,’ Zielinski told the Daily Mail. ‘I think that most people would agree that coffee is a beverage. That’s not technology. People are not eating computers.’
The Daily Mail visited some of the Luckin Coffee locations in New York after the announcement and the shops were still refusing to accept paper money, with employees claiming that a change could only be made by the company’s headquarters.
New York’s Office of the Attorney General has already replied to Zielinski’s complaint, saying that Luckin was now at risk of a $1,000 fine for violating the state’s cash law and a $1,500 fine for every incident reported after that.
Zielinski believes New York’s acknowledgment of the situation was an encouraging first step in preventing the Luckin app from potentially being used nationwide, putting millions at risk from China’s intelligence laws.
‘Once they get their feet in New York City, they’re going to be spreading very rapidly all throughout the country,’ he predicted.
Zielinski said Luckin Coffee is ‘not even the tip of the iceberg of everything that’s going on,’ but that it ‘might [be enough to] catch people’s attention.’
During a speech in 2024, Wray said that seemingly no American industry is off limits to the Chinese government.
‘The PRC has made it clear that it considers every sector that makes our society run as fair game in its bid to dominate on the world stage, and that it plans to land low blows against civilian infrastructure to try to induce panic and break America’s will to resist,’ Wray said.
