Introduction to the Lawsuit

Crypto exchange Coinbase has been hit with a lawsuit filed in a District Court in California on May 1st, claiming violation of Illinois’ Biometric Information Privacy Act (BIPA). The suit alleges that the exchange improperly collected, stored, and distributed customers’ biometric data, including fingerprint and facial recognition information.

Plaintiff Michael Massel is seeking relief in the form of $5,000 in damages for each “intentional and reckless violation” of BIPA and an additional $1,000 for every violation discovered by Massel’s legal representation.

Accusations and BIPA Regulations

The lawsuit accuses Coinbase of collecting biometric information through its Know Your Customer (KYC) procedures, which involves illegally obtaining, using, storing, and disseminating the data. BIPA regulations mandate that a company collecting biometric data must inform a person in writing that it obtains such data and specify the purpose and duration of the data’s storage. Furthermore, BIPA requires written consent from a customer, and the company must publish “publicly‐available written retention schedules and guidelines for permanently destroying biometric identifiers and biometric information.”

Massel’s legal team contends that Coinbase does not comply with these regulations when collecting customers’ data before and after creating new accounts. They argue that Coinbase’s “collection, obtainment, storage, and use” of customers’ biometric data is “unlawful” and exposes clients to “serious and irreversible privacy risks.”

Potential Consequences and Data Destruction

The legal document states that if Coinbase’s database containing facial geometry scans or other sensitive biometric data is hacked, breached, or otherwise exposed, Coinbase users have no means to prevent identity theft. Furthermore, the lawsuit claims that the exchange should have “permanently destroyed” such data after a customer created a Coinbase account since the information was obtained solely for account creation purposes.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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