Source: Cointelegraph
Original: “Coinbase Faces Lawsuit for Alleged Violations of Illinois Biometric Privacy Law”
A group of Coinbase users from Illinois has filed a class-action lawsuit against the cryptocurrency exchange, accusing its identity verification procedures of violating the state's Biometric Information Privacy Act (BIPA).
Plaintiffs Scott Bernstein, Gina Greeder, and James Lonergan claim in a lawsuit submitted to federal court on May 13 that Coinbase's "mass collection" of facial features to meet "Know Your Customer" (KYC) requirements violates BIPA, as they did not receive the relevant notifications.
The group of users pointed out that Coinbase failed to provide written notice to users regarding the collection, storage, or sharing of their biometric data, as well as the purpose of data use and retention plans.
"Coinbase has not publicly provided the retention plan or guidelines for the permanent destruction of the plaintiffs' biometric identifiers as required by BIPA," the lawsuit states.
Court documents show that Coinbase requires users to verify their identity by uploading a government-issued photo ID and a selfie, which are then sent to third-party identification software for scanning and extraction of facial geometric features.
The plaintiffs claim that this process captures biometric identifiers without obtaining informed written consent from users, violating BIPA regulations.
Additionally, the plaintiffs allege that Coinbase shared biometric data with third-party verification providers such as Jumio, Onfido, Au10tix, and Solaris without user consent, which constitutes a violation of the law.
"Coinbase violates [BIPA] by 'obtaining' biometric data because it explicitly instructs third-party verification providers to use their software to verify and authenticate users, including the plaintiffs, and that software achieves this function by collecting biometric data," the lawsuit states.
According to the plaintiffs, over 10,000 individuals have filed arbitration requests with the American Arbitration Association regarding the related issues, but Coinbase allegedly refused to pay the necessary arbitration fees, leading to the dismissal of these requests.
The lawsuit presents three counts of violating state biometric privacy laws, as well as one count of consumer fraud under the Illinois Consumer Fraud and Deceptive Business Practices Act.
The plaintiffs seek $5,000 in damages for each intentional or reckless violation and $1,000 for each negligent violation, while also seeking injunctive relief and reimbursement of legal fees.
Notably, Coinbase is also facing at least six lawsuits related to a recent incident where some customer support agents were bribed to leak user data, disclosed on May 15.
In May 2023, a group of Coinbase users had previously sued the exchange with similar BIPA violation claims.
A judge later allowed the lawsuit to be paused pending arbitration, and on February 3, the case was dismissed without prejudice after Coinbase and the user group agreed to withdraw the lawsuit.
Related: Reports indicate that Galaxy Digital is seeking to tokenize shares following its listing on Nasdaq.
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