A class action lawsuit has been proposed against Coinbase regarding the violation of customer privacy via biometrics collections. The lawsuit claims that the company went against the privacy laws set in Illinois when it collected and stored its users’ fingerprints and facial scans biometric data.
Illinois resident challenges Coinbase’s KYC process in court
The lawsuit was filed on May 1 in a California District Court by one of the exchange’s users claiming that the requirement for a customer to upload pictures of their valid government ID and Self-Potrait for Know Your Customer checks (KYC) may be violating certain provisions of Illinois’ Biometric Information Privacy Act (BIPA).
The court filing argues that the requirement for users to give Coinbase their biometric data shouldn’t be mandatory, according to BIPA. It explains that the company should rather ask for permission from Illinois residents to collect their data and include information on how long it intended to store it, how it would be using it and the steps involved in the permanent destruction of the sensitive data.
“Coinbase had no written policy, made available to the public, establishing a retention schedule and guidelines for permanently destroying biometric information,” the suit argued.
Coinbase lawsuit May 1 2023
The complainant argues that Thousands of Highly detailed geometric maps of the face have been wrongfully taken, processed and stored by the company against the will of Illinois residents. It explains that the actions by Coinbase in the collection, usage and storage of the data pose serious and irreversible privacy risks.
The lawsuit added that in the case of Coinbase’s database hacking, Illinois residents would have no means of preventing identity theft. It stressed that Coinbase is in the wrong for lacking transparency in destroying the data permanently once a user opts to close their trading accounts.
The lawsuit seeks the payments of damages of $5,000 per intentional BIPA violation or $1,000 per violation if the court finds out that the company did not go against the regulations willingly.
The KYC process used by Coinbase is similar to all other crypto exchanges. As such, the direction of this case rests with the court process. Keep watching Fintech Express for updates on this and other FinTech-related news.