Coinbase Sued Over Alleged Violation of Illinois Biometric Privacy Law

In Brief:

Coinbase is facing a federal lawsuit for allegedly violating Illinois’ Biometric Information Privacy Act (BIPA).

Plaintiffs claim Coinbase collected facial fingerprints for KYC without proper notice or consent.

On May 13, a federal lawsuit was filed against Coinbase, accusing the crypto exchange of violating Illinois' Biometric Information Privacy Act (BIPA). The lawsuit centers on the company’s use of facial recognition technology to verify users’ identities as part of its Know Your Customer (KYC) compliance process.

According to the complaint filed by three plaintiffs, Coinbase engaged in the extensive collection of facial fingerprints without providing users with written notice about how their biometric data would be collected, stored, or shared. The suit also claims that Coinbase failed to inform users of the purpose behind the data collection and the retention period for such sensitive information.

Under BIPA, companies must obtain informed written consent before collecting or handling biometric identifiers like fingerprints or facial geometry. Violations of this law have led to substantial penalties for other tech firms in recent years.

Coinbase has not yet issued a public statement on the lawsuit. The case adds to the regulatory and legal scrutiny surrounding the company, which is already navigating complex compliance challenges as a publicly listed crypto exchange.

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