The leading cryptocurrency exchange, Coinbase, has been hit with a lawsuit alleging the company of violating the Biometric Information Privacy Act (BIPA) in Illinois.
Michael Massel, the plaintiff, has filed the lawsuit on behalf of himself and others similarly situated, accusing the company of unlawful collection, use, storage, and disclosure of biometric data.
Coinbase’s biometric authentication process under scrutiny
According to the court filing, Coinbase requires users to upload a state-issued identification and a real-time selfie when signing up or accessing their accounts.
The company then scans the selfie, creates a biometric template of the user’s face, and compares it to the photograph on the ID document to confirm if they match.
Moreover, Coinbase users are instructed to set up biometric authentication for use with the company’s mobile app, which requires scanning their fingerprints on their mobile devices.
Massel claims that Coinbase wrongfully profits from the facial and fingerprint scans it has collected or otherwise obtained from its users, and that the company’s actions expose users to serious and irreversible privacy risks.
He argues that facial geometry and fingerprint scans are unique, permanent biometric identifiers that cannot be changed or replaced if stolen or compromised.
BIPA compliance in question
The Illinois Legislature enacted BIPA to protect residents’ privacy interests in their biometric data. The act provides that a private entity like Coinbase may not obtain and/or possess an individual’s biometrics unless it meets certain requirements.
These requirements include informing the person in writing about the collection, storage, and use of biometric data, receiving a written release from the person, and publishing publicly-available written retention schedules and guidelines for permanently destroying biometric identifiers and biometric information.
Massel alleges that Coinbase has created, collected, and stored thousands of face templates and fingerprints from countless Illinois residents whose selfies, state-issued IDs, and fingerprints were collected by the company.
He claims that the crypto company is subject to all requirements of BIPA and has failed to comply with them.
Coinbase’s legal woes intensify
The lawsuit further complicates the legal landscape for the popular cryptocurrency exchange. If the court finds Coinbase in violation of BIPA, it could potentially result in significant financial consequences for the company and serve as a cautionary tale for other businesses that handle biometric data.
The case highlights the growing importance of data privacy regulations and the potential liabilities that companies face for non-compliance.
As of now, Coinbase has not publicly commented on the lawsuit. It remains to be seen how this legal challenge will unfold and whether it will have any lasting impact on the company’s operations or the broader cryptocurrency industry.