Cryptocurrency exchange Coinbase is facing a new legal challenge — this time in Illinois, where a class-action lawsuit accuses the company of violating the state’s Biometric Information Privacy Act (BIPA) during its user identity verification procedures.

Filed on May 13 in a federal court in Chicago, the lawsuit claims that Coinbase required users to upload a government-issued ID and a selfie, which were then processed by third-party facial recognition software. According to the plaintiffs, this process captured sensitive biometric identifiers, such as facial geometry, without informed user consent.

The complaint argues that:

🔹 users were not notified beforehand that biometric data would be collected,

🔹 no information was provided about how long the data would be stored or how it would be destroyed,

🔹 there was no public policy outlining the handling of this data.

“At no point are Coinbase users informed of the type of biometric data being collected, how it will be stored, who may have access to it, or when and how it will be destroyed,” states the complaint Bernstein v. Coinbase Global, Inc.

Third Parties Allegedly Involved

The lawsuit also claims that Coinbase shared users’ facial data with external vendors, including Jumio, Onfido, Au10tix, and Solaris, without obtaining explicit, written consent.

Over 10,000 Arbitration Requests Ignored?

According to the plaintiffs, more than 10,000 individuals filed arbitration claims over similar issues. However, Coinbase allegedly failed to pay the required arbitration fees, resulting in many cases being dismissed.

The group is now seeking up to $5,000 per willful violation, or $1,000 for negligent violations, in addition to legal costs and a court injunction.

Coinbase Has Yet to Respond

As of now, Coinbase has not issued a public statement on the lawsuit. However, this isn’t the first time the company has faced scrutiny over alleged BIPA violations in Illinois.

A Familiar Pattern

Back in May 2023, a similar class-action lawsuit was filed, accusing Coinbase of collecting facial data and fingerprint templates via its mobile app. That case was later dismissed after the court granted Coinbase’s request to move the dispute to arbitration.

Data Leak Scandal Adds to Pressure

Coinbase is also under fire following a recent data breach, in which customer support agents were allegedly bribed to leak user information. So far, at least six separate lawsuits have been filed in connection to the breach.

Illinois Dropped a Separate Case

Interestingly, Illinois recently dropped another lawsuit against Coinbase related to its staking program — following similar decisions by Kentucky, Vermont, and South Carolina, after the U.S. SEC rejected their complaints.



#coinbase , #CryptoPrivacy , #CryptoSecurity , #CryptoNewss , #CryptoSafety

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