Digital identity exists in a digitized form, coexisting with cyberspace. The ubiquitous nature of the internet, omnipresent at all times, presents digital identities in forms such as cloud-based, micro-based, hypertext-based, visualized, and fragmented. While enhancing convenience in human life and production, it also entails certain ethical risks. The unreasonable application of digital identity primarily targets four ethical issues: identity, privacy, freedom, and justice. Specifically, it manifests as the weakening of personal and societal identity, leading to a dilemma in integrative privacy protection and the privacy paradox. It obscures individuals’ free will and societal ability to forget, implying issues of data bias and unjust algorithmic logic. With the increasing prevalence of the internet, traditional identities are gradually transitioning towards digital identities, making the enhancement of ethical risk governance related to digital identities a crucial topic of our time. In this new developmental phase, there should be a comprehensive utilization of collaborative interactions among technology, law, and ethics to achieve the coordinated governance of ethical risks associated with digital identity. This involves enhancing the sense of digital social identity, safeguarding digital identity privacy rights, overcoming the alienation of digital identity, mitigating the discriminatory impacts of algorithmic logic, enabling it to better serve socio-political-economic development, and meeting the aspirations for a better life among people. From a technological governance perspective, there is a need to reinforce technological innovation and development while overcoming the inherent negative effects of technology. On the legal governance front, it is crucial to uphold the legislative principle of balancing rights and obligations, providing legal safeguards for digital identity applications. From an ethical governance standpoint, all stakeholders must strengthen self-restraint and consciously become an essential complementary force in the governance of digital identity.