Coinbase Faces New Lawsuit Over Biometric Data Collection
Date: 2025-05-20 Author: Oliver Abernathy Categories: BUSINESS
Coinbase is once again at the center of a legal scandal. Several Illinois users have filed a class action lawsuit alleging that the cryptocurrency exchange violated the Biometric Information Privacy Act (BIPA). According to the plaintiffs — Scott Bernstein, Gina Grieder, and James Lonergan — Coinbase collected individuals’ data without proper notice and consent, which is contrary to state law.
As part of the mandatory Know Your Customer (KYC) procedure, users are required to upload photos of their IDs, as well as selfies. According to the lawsuit, these images are fed into third-party facial recognition software, where they are scanned and unique geometric features of the face are extracted. All of this, according to the plaintiffs, occurs without informed written consent, which is the basis of the claims.
Additionally, users claim that Coinbase not only failed to notify them about the collection and processing of biometric data, but also failed to provide information about the storage periods and the possibility of transferring this data to third parties. Such behavior, according to the plaintiffs, is a direct violation of BIPA.
This is not the first time that Coinbase has faced such accusations. In May last year, a similar group of users already filed a lawsuit on the same grounds. Then the case ended in an out-of-court settlement. However, the current lawsuit emphasizes that the problems with biometric security on the platform remain unresolved.
The situation is complicated by the fact that on May 15, 2025, the exchange confirmed the publication of The New York Times about cases of corruption among support employees who allegedly provided outsiders with access to confidential customer data. These accusations became another blow to Coinbase's reputation, increasing mistrust among users and investors.
At the time of publication, the company has not issued an official response to the latest class action lawsuit. However, experts believe that the lawsuit could draw attention to the practice of using biometric data in the crypto industry and provoke stricter regulations.
