Cryptocurrency exchange Coinbase is facing a class-action lawsuit filed by Illinois users who allege that the company unlawfully collected biometric data, including facial scans and fingerprints, without proper consent. The lawsuit highlights significant concerns regarding data privacy and compliance with state laws governing biometric information.
Key Takeaways
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Coinbase is accused of violating Illinois’ Biometric Information Privacy Act (BIPA).
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The lawsuit claims Coinbase collected biometric data without user consent.
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Plaintiffs seek damages of up to $5,000 per violation and additional relief.
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The case underscores the growing scrutiny of biometric data practices in the tech industry.
Allegations Against Coinbase
The lawsuit, initiated by plaintiffs Scott Bernstein, Gina Greeder, and James Lonergan, was filed in federal court in San Francisco on May 13, 2025. The plaintiffs assert that Coinbase's identity verification process, which requires users to upload government-issued IDs and selfies, constitutes a wholesale collection of biometric data without the necessary informed consent.
The complaint details several key violations:
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Lack of Notification: Coinbase allegedly failed to inform users in writing about the collection, storage, and sharing of their biometric data, as mandated by BIPA.
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Third-Party Sharing: The lawsuit claims that Coinbase shared biometric data with third-party verification vendors, including Jumio and Onfido, without user consent.
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Absence of Retention Policies: Plaintiffs argue that Coinbase does not publicly disclose its data retention schedule or guidelines for the destruction of biometric identifiers, further violating BIPA.
Legal Context and Implications
The Illinois Biometric Information Privacy Act is one of the strictest laws in the United States regarding the collection and use of biometric data. It requires companies to obtain explicit consent from individuals before collecting their biometric identifiers and to provide clear information about how that data will be used and stored.
The plaintiffs are seeking:
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Damages: $5,000 for each willful or reckless violation and $1,000 for each negligent violation.
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Injunctive Relief: Changes to Coinbase's data collection practices to ensure compliance with BIPA.
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Litigation Costs: Coverage for legal fees incurred during the lawsuit.
Coinbase's Response and Industry Impact
Coinbase has not publicly commented on the lawsuit as of yet. However, the company has previously faced similar allegations, with over 10,000 users reportedly filing demands for arbitration regarding these issues. The refusal of Coinbase to pay arbitration fees has led to the dismissal of those claims, allowing plaintiffs to pursue their case in court.
This lawsuit is part of a broader trend where companies that collect biometric data are increasingly scrutinized for their practices. As more businesses adopt biometric technologies for user verification, the potential for legal challenges under laws like BIPA is likely to grow.
Conclusion
The outcome of this lawsuit could have significant implications for Coinbase and the broader cryptocurrency industry, particularly regarding how companies handle sensitive biometric data. As privacy concerns continue to rise, the need for transparent data practices and compliance with privacy laws will be more critical than ever.
Sources
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Coinbase Sued For Illegal Harvesting Of Biometric Data, Bitcoin Magazine.
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Coinbase faces lawsuit over alleged breaches of Illinois biometric privacy law, Cointelegraph.
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Coinbase Sued Over Face-Scan System After Ducking Arbitration, Bloomberg Law News.
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