Coinbase faces lawsuit over alleged breaches of Illinois biometric privacy law

Coinbase is facing a class-action lawsuit filed by a group of Illinois users alleging violations of the Illinois Biometric Information Privacy Act (BIPA).

The plaintiffs claim that Coinbase's identity verification process, which requires users to upload a government-issued photo ID and a selfie, involves the collection of biometric data (faceprints) without obtaining the required written consent and without providing proper notifications about the collection, storage, sharing, and retention of this data, as mandated by BIPA.

Specifically, the lawsuit alleges that Coinbase failed to notify users in writing about the collection and use of their biometric data. It did not publish a retention schedule or guidelines for permanently destroying biometric identifiers. Shared biometric data with third-party verification vendors without users' consent and collected biometric identifiers through facial recognition technology as part of its Know Your Customer (KYC) requirements without informed written consent.

The plaintiffs also assert that more than 10,000 individuals filed demands for arbitration over these issues, but Coinbase allegedly refused to pay the arbitration fees, leading to dismissal of those cases and prompting the current federal lawsuit.

The suit brings claims for willful or reckless violations of BIPA, negligent violations, and consumer fraud under the Illinois Consumer Fraud and Deceptive Business Practices Act. The plaintiffs seek statutory damages of $5,000 per willful or reckless violation, $1,000 per negligent violation, injunctive relief, and litigation costs.

This is not the first time Coinbase has faced legal challenges related to biometric data privacy in Illinois, indicating ongoing scrutiny of its compliance with biometric privacy laws.

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