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Coinbase sued over alleged unauthorized collection of users’ biometric data: details


Cryptocurrency exchange Coinbase has once again found itself in legal trouble – this time for allegedly collecting users’ biometric data without consent and authorization. The lawsuit was filed in District Court in California by plaintiff Michael Massell. With this lawsuit, Muscle alleged that the US-based cryptocurrency exchange had bypassed the Illinois Biometric Information Privacy Act (BIPA). This law ensures that no conglomerates collect and store vital details such as the thumbprints of their customers.

Coinbase has been blamed for illegally collecting, using and storing fingerprints and facial scans of its users. Users need to register these biometrics as identifiers to access their accounts as part of Coinbase’s Know Your Customer (KYC) requirements.

However, the lawsuit alleges that the exchange uses this biometric data to enhance the use and operation of the “app-based” internet platform.

A Decrypt company report said the plaintiff has decided to take legal action against Coinbase accusing the exchange of disclosing its biometric details to multiple third parties.

The Plaintiff opened a Coinbase account within the five years immediately prior to filing this matter. Coinbase users, including the Plaintiff, are required to set up biometric authentication for use with the Coinbase mobile app. This biometric authentication requires Coinbase users, including the Plaintiff, to scan Their fingerprints to verify users’ identities when logging into the mobile app. Coinbase collects, stores, owns, obtains, uses, and disseminates the biometric data of its users, among other things, to enhance Coinbase and its online “app-based” platform. The lawsuit alleges that Coinbase profitably erroneous facial and fingerprint scans that it has collected or otherwise obtained from its users.

So far, Coinbase has not responded to this new development.

The company has been facing legal troubles for a while now. However, Coinbase claims that it maintains strict compliance with the laws of all the regions in which it operates.

In March of this year, the US Securities and Exchange Commission (SEC) threatened to sue Coinbase Global over certain cryptocurrency spot markets as well as its Earn, Prime, and Wallet products. Coinbase’s move to get the SEC to decide on its petition is seen as a response to the SEC’s threat to investigate the crypto company.

Founded in 2012, Coinbase is described as the largest crypto exchange in the United States and one of the largest cryptocurrency exchanges in the world.

According to Bankless Times, Coinbase registered about 103 million users in 2022, along with nine million monthly active users.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.