Coinbase exchange has been accused of illegally collecting biometric data

What’s new? A group of Coinbase users from Illinois has filed a class action lawsuit against the crypto exchange, alleging that its identity verification process violates the state’s Biometric Information Privacy Act (BIPA). Plaintiffs Scott Bernstein, Gina Greeder, and James Lonergan said in a lawsuit for federal court that the bulk collection of facial images under the Know Your Customer (KYC) policy violates BIPA because they were not notified.

Statement of claim

What else is known? The group claimed that Coinbase failed to notify users in writing of the collection, storage, or transfer of their biometric data to third parties, as well as the purpose and retention period of that data.

It is alleged that Coinbase requires users to prove their identity by uploading a government-issued ID card with selfies, which are then sent to third-party facial recognition software to scan and extract facial geometry.

This process captures biometric identifiers without users’ informed written consent, which the lawsuit alleges violates BIPA.

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In addition, the group claimed that Coinbase violated the law by sharing biometric data without user consent with third-party verification providers such as Jumio, Onfido, Au10tix, and Solaris.

The lawsuit mentions that more than 10 000 people filed complaints about the issue with the American Arbitration Association, to which Coinbase allegedly refused to pay the required fees, resulting in their dismissal.

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The lawsuit contains three allegations of BIPA violations and one allegation of defrauding consumers under the Illinois Fraud and Unfair Business Practices Act and seeks $1000 to $5000 in damages for each violation and court costs.

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Earlier this month, Coinbase received at least six lawsuits. For example, on May 15, the exchange confirmed NYT information about cases of its tech support staff bribing its customers’ personal data.

In addition, in May 2023, a group of Coinbase users also sued the exchange for violating BIPA, but the parties agreed to a settlement.