Crypto Exchange Coinbase Faces Legal Action Over Biometric Data Collection

The Nasdaq-listed cryptocurrency exchange Coinbase has been accused of “wrongfully” profiting from its users’ facial and fingerprint scans. “Coinbase collects, stores, possesses, otherwise obtains, uses, and disseminates its users’ biometric data to, amongst other things, further enhance Coinbase and its online ‘app-based’ Platform,” a proposed class action lawsuit details.

A proposed class action lawsuit, filed Monday in the Northern District of California, alleges that the Nasdaq-listed cryptocurrency exchange Coinbase (Nasdaq: COIN) illegally collects face templates and fingerprints of its customers in violation of Illinois’ biometric privacy law.

Plaintiff Michael Massel, a Coinbase customer, explained that the crypto exchange requires users to upload a government ID and selfie for verification and set up biometric authentication (fingerprint scan) for mobile app login.

“Coinbase collects, stores, possesses, otherwise obtains, uses, and disseminates its users’ biometric data to, amongst other things, further enhance Coinbase and its online ‘app-based’ Platform,” the lawsuit describes, adding:

Coinbase wrongfully profits from the facial and fingerprint scans it has collected or otherwise obtained from its users.

“Facial geometry and fingerprint scans are unique, permanent biometric identifiers associated with each user that cannot be changed or replaced if stolen or compromised. Coinbase’s unlawful collection, obtainment, storage, and use of its users’ biometric data expose them to serious and irreversible privacy risks,” the plaintiff detailed.

The Illinois Biometric Information Privacy Act (BIPA) has been a major driver of lawsuits against companies across a wide range of industries in recent years. The law requires companies to obtain consent before collecting biometric data, including fingerprints or facial scans, and to let users know how long the data will be kept. According to the complaint:

Coinbase has created, collected, and stored thousands of ‘face templates’ – highly detailed geometric maps of the face – and fingerprints from countless Illinois residents.

What do you think about Coinbase’s alleged collection and use of customers’ biometric data? Let us know in the comments section below.