An Illinois federal judge has granted Coinbase’s request to pause proceedings in a lawsuit alleging the crypto exchange violated the state’s biometric privacy law, pending the outcome of a related appellate case.
In a Thursday filing, U.S. District Judge Sharon Johnson Coleman approved the motion to stay the case, which accuses Coinbase of improperly collecting and sharing users’ biometric data through its Know Your Customer (KYC) process. The judge said awaiting a decision from the U.S. Court of Appeals for the Seventh Circuit in a similar case against Nuance Communications could “simplify the issues and streamline the trial” while reducing the litigation burden on both the court and parties.
The lawsuit, filed in May, claims Coinbase’s “wholesale collection” of users’ facial data violated Illinois’ Biometric Information Privacy Act (BIPA), which requires companies to notify and obtain consent before collecting such information. Plaintiffs further allege that Coinbase shared this biometric data with third-party verification providers without authorization.
Under BIPA, reckless or intentional violations can result in fines of up to $5,000 per incident, while negligent violations carry penalties of up to $1,000 each. The plaintiffs are also seeking coverage of legal expenses.
The case comes as Coinbase faces heightened scrutiny over its handling of user data. In May, the exchange disclosed that overseas customer support contractors had been bribed to leak user account details. Those contractors were later terminated, and the culprits allegedly attempted to extort $20 million worth of Bitcoin — a demand Coinbase refused.
The pause in proceedings means the outcome of the Seventh Circuit’s ruling on the Nuance case could heavily influence how the court handles the Coinbase lawsuit going forward.
