Coinbase Faces Lawsuit Over Illinois Biometric Privacy Violations

• Coinbase sued in Illinois for collecting faceprints without consent.
• Lawsuit alleges violations of Illinois’ Biometric Privacy Act.

According to the lawsuit, Coinbase Global Inc. is accused by the Illinois attorney general of violating the state’s Biometric Information Privacy Act (BIPA). A complaint was filed in a court on May 13, 2025, stating Coinbase took facial scans of its users without proper consent during the KYC process. Scott Bernstein, Gina Greeder and James Lonergan claim that using biometric data violates Illinois strict biometric privacy laws and Coinbase may face serious fines as a result.

The lawsuit claims that Coinbase’s identity verification process which uses facial biometric scans, is unlawful. Based on the court documents, Coinbase did not provide users with required written consent for collecting, storing, sharing and keeping their biometric data. They believe that because the data is not transparent, it poses a danger to user privacy and goes against the laws in the state.

Legal violations that are alleged and claims made in court

The suit lists three instances where BIPA rules were broken, since Coinbase did not inform or get permission before collecting biometric information. According to the Illinois Consumer Fraud and Deceptive Business Practices Act, Coinbase’s behavior constitutes misleading practices. If the plaintiffs succeed in their demands $5,000 for deliberate breaches and $1,000 for careless violations, Coinbase may face fines in the millions.

Court documents state that Coinbase gives biometric information to companies such as Jumio, Onfido and Au10tix so they can verify customers’ identities. According to the plaintiffs, the information was shared with users without proper notice which violates BIPA’s strict rules even more. The lawsuit claims that Illinois law requires companies to have specific policies on their use of biometric data and Coinbase did not provide these.

The case filed in the Northern District of Illinois demonstrates that biometric data in the tech and crypto world is being watched more closely. The Illinois BIPA is considered one of the strongest privacy laws in the country, requiring companies to first get permission before recording fingerprints or facial scans. Other well-known cases such as those brought against Facebook and Google, have resulted in huge settlements.

A General Overview of the Legal Difficulties Facing Coinbase

Coinbase faces this lawsuit just as it is dealing with other legal issues. On May 15, 2025, Coinbase announced that some of their customer support agents in India had leaked users’ information, including names, their account balances and what transactions they had made. As a result, six more lawsuits were filed, some accusing the bank of not protecting data well enough and improperly growing rich due to poor efforts in cybersecurity. With the biometric privacy case, Coinbase is facing even more legal issues, making people wonder how it handles customer information.

Their arguments also highlight wider issues related to privacy in the world of cryptocurrency. Due to regulations, more exchanges like Coinbase are using KYC and requesting sensitive information, including biometrics. The lawsuit contends that these practices must adhere to the strong state privacy laws that exist in Illinois, among other places.

Although Coinbase has remained silent over the biometric privacy complaint, the United States Securities and Exchange Commission (SEC) agreed to dismiss an enforcement proceeding against the business in February 2025, subject to Coinbase’s approval.That case, in which Coinbase was said to run an unregulated platform for trading securities, was viewed as a major success for the crypto industry. Nevertheless, a biometric privacy lawsuit is a unique challenge, since BIPA fines can cost Coinbase a lot of money and damage their reputation among those who care about privacy.

The decision made in the lawsuit could become a model for cryptocurrency platforms with biometric data. There are thousands of arbitration cases that could influence the case which makes things very serious for Coinbase and the crypto sector as a whole. As more details about the case become known, the topic of how laws and privacy are handled in the world of digital assets is likely to arise.

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