US court grants brief stay in Coinbase lawsuit involving biometric data

An Illinois federal judge has granted a brief stay in a class-action lawsuit against cryptocurrency exchange Coinbase, which alleges violations of the state's Biometric Information Privacy Act (BIPA).

The lawsuit, filed in May 2025, claims Coinbase engaged in "wholesale collection" of users' faceprints through its Know Your Customer (KYC) processes without proper notification and shared this biometric data with third-party verification providers without user consent.

Under Illinois law, such violations, if deemed reckless or intentional, may result in damages up to $5,000 per instance, and $1,000 for negligent violations, along with litigation expense reimbursement sought by the plaintiffs.

The stay was granted by Judge Sharon Johnson Coleman in the US District Court for the Northern District of Illinois Eastern Division, pending a ruling from the US Court of Appeals for the Seventh Circuit.

This appellate court is considering a related case about a financial institution exemption to BIPA. Coinbase requested the stay arguing that the appellate decision could impact its lawsuit, potentially simplifying issues and reducing litigation burden without unfairly prejudicing the plaintiffs.

This pause aligns with broader challenges facing tech and fintech firms regarding biometric data compliance under state privacy laws. The case also follows a May 2025 data breach incident where Coinbase contractors improperly accessed user account data, leading to further lawsuits about data mishandling.

The court's stay temporarily halts the progress of the biometric data lawsuit against Coinbase while awaiting a significant ruling that may clarify the application of Illinois' biometric privacy law to financial and tech companies like Coinbase.

It's me, @justmythoughts, an ordinary Hive user looking to make the most of the platform. I will appreciate your support. Follow me for more. Thanks, Gracias :)

Posted Using INLEO