Coinbase is facing a class-action lawsuit in a California District Court over allegations of violating Illinois’s biometric privacy laws. The lawsuit, filed on May 1, 2023, by a Coinbase user, claims that the exchange’s requirement for customers to provide fingerprints and facial templates for KYC checks violates certain provisions of the Biometric Information Privacy Act (BIPA) in Illinois.
The plaintiff alleged that Coinbase was obligated by BIPA to obtain users’ consent before collecting their biometric information. Additionally, Coinbase was required to disclose the reason for gathering such data, the duration of its storage, its intended use, and the method by which Coinbase would dispose of it permanently.
According to the lawsuit, Coinbase did not have a publicly available written policy that established guidelines for permanently destroying biometric information. This policy should have included a retention schedule and specified that the destruction should occur when the initial purpose for collecting the biometric information has been fulfilled or within three years of the individual’s last interaction with Coinbase.
The lawsuit further claimed that Coinbase has generated, amassed, and preserved numerous “face templates,” detailed geometric representations of faces and fingerprints of numerous Illinois residents.
The plaintiff argued that Coinbase’s unlawful collection, obtainment, storage, and use of users’ biometric data exposes them to serious and irreversible privacy risks. They noted that in the event of a breach or exposure of Coinbase’s database that includes facial geometry scans or other proprietary biometric data, users would have no recourse to prevent their highly personal and private information from being unlawfully or improperly used, including identity theft and unauthorized tracking.
Meanwhile, in March 2023, Coinbase’s co-founder and CEO, Brian Armstrong, expressed his dissatisfaction with the lack of clear cryptocurrency regulations in the United States. He compared the SEC to “pickleball referees” following Coinbase’s receipt of a Wells Notice on March 22, 2023.
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