Cryptocurrency exchange Coinbase is currently facing a class-action lawsuit in Illinois, with allegations that the company may have violated the state’s Biometric Information Privacy Act. The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, claims that Coinbase improperly collected and stored facial data during its identity verification process.
The group of Coinbase customers involved in the lawsuit accuses the platform of scanning users’ facial geometry without proper notice or consent, which directly violates Illinois’ biometric privacy laws. Users were reportedly required to upload a government-issued ID and a selfie, which were then processed by third-party facial recognition software. This process allegedly captured users’ biometric identifiers, such as faceprints, without prior written notice or notification of the collection, as required by BIPA.
The lawsuit also alleges that Coinbase transmitted facial data to third-party vendors without obtaining explicit permission from users. Additionally, it claims that over 10,000 individuals have filed for arbitration over these issues, but Coinbase has allegedly failed to pay the necessary arbitration fees, resulting in the dismissal of many cases.
The group behind the lawsuit is seeking financial penalties of up to $5,000 per reckless violation or $1,000 per negligence violation, as well as legal expenses and injunctive relief. As of now, Coinbase has not publicly commented on the lawsuit.
This is not the first time Coinbase has faced allegations of BIPA violations in Illinois. A previous class-action lawsuit targeted the exchange for its collection of facial data and fingerprint templates through its mobile app, ultimately leading to the case being dismissed without prejudice earlier this year.
In addition to the biometric privacy lawsuit, Coinbase has also been embroiled in controversy over a recent data breach involving customer support agents allegedly bribed to leak user data. Several related lawsuits have been filed in response, raising concerns about the platform’s handling of sensitive information.
On a separate note, Illinois recently dropped a lawsuit against Coinbase over its staking program, following similar actions by other states after the SEC dismissed its own case.
The outcome of the current biometric privacy lawsuit against Coinbase remains to be seen, as the platform faces increased scrutiny over its data handling practices and compliance with privacy regulations.