Coinbase Hit With Class-Action Lawsuit Over Biometric Privacy Violations

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Class-Action Lawsuit Against Coinbase

• Crypto exchange Coinbase is facing a proposed class-action lawsuit alleging that it violated Illinois’ Biometric Information Privacy Act (BIPA) by collecting and storing customers’ fingerprints and facial templates without proper permission.
• The lawsuit contends that Coinbase failed to provide written policies outlining the data’s purpose, storage duration, and disposal methods.
• It seeks $5,000 in damages for each intentional BIPA violation or $1,000 if the alleged violations were not deliberate.

Allegations against Coinbase’s KYC Protocols

The legal complaint filed by a Coinbase user in a California district court on May 1 claims that the exchange uses photos to create a biometric model of a user’s face and collects “highly detailed geometric maps of the face” and fingerprints of thousands of Illinois inhabitants without properly informing users about this data collection. Furthermore, it alleges that Coinbase’s mobile app requires biometric verification such as fingerprint or facial recognition for account access.

Risks for Users

The case maintains that these actions are illegal and expose users to “grave and irrevocable privacy risks.” If the database containing sensitive biometric data is hacked or breached, users have no way to prevent identity theft. Under BIPA, firms must obtain user consent when collecting their biometrics and inform them about the purpose, storage length and disposal methods of this data. However, this was allegedly not done by Coinbase.

Damages Sought

The lawsuit seeks $5,000 in damages for each intentional BIPA violation or $1,000 if the alleged violations were not deliberate as well as payment for legal fees and court costs related to this class action suit.

Coinbase Shares Trading at High Price

Coinbase shares are currently trading at just over $50 per share after almost 50% increase this year despite this legal action taken against them. The company has yet to comment on the issue but with its soaring share prices it seems investors are unphased by these allegations against them so far.

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