US court grants brief stay in Coinbase lawsuit involving biometric data

An Illinois judge has granted a motion to stay proceedings in a lawsuit against cryptocurrency exchange Coinbase pending a ruling in the appellate court.

In a Thursday filing in the US District Court for the Northern District of Illinois Eastern Division, Judge Sharon Johnson Coleman granted a motion filed by Coinbase to stay a lawsuit involving alleged violations of the state’s Biometric Information Privacy Act.

The motion requested waiting for a ruling from the US Court of Appeals for the Seventh Circuit, which is considering a case involving Nuance Communications supplying voice identification technology to Charles Schwab — a decision that could impact the Coinbase lawsuit. 

“[T]he Court finds that the stay would simplify the issues and streamline the trial […] reduce the burden of litigation on the Court and the parties […] [and] would not unduly prejudice or tactically disadvantage Plaintiffs,” said the Thursday filing granting Coinbase’s motion.

The lawsuit, filed in May, alleged that Coinbase’s “wholesale collection” of faceprints for its Know Your Customer (KYC) requirements violated the Illinois law, as users weren’t notified. The group of Coinbase users also alleged that the exchange shared their biometric data without their consent to third-party verification providers, which was a violation of the law.

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Under Illinois’ Biometric Information Privacy Act, private entities that violate the law in a “reckless” or “intentional” manner may be required to pay damages up to $5,000 for each instance, as well as $1,000 for each negligent violation. The plaintiffs also sought relief for litigation expenses. 

Major Coinbase data breach

In May, Coinbase disclosed that a group of customer support contractors accessed account data for users in exchange for bribes. The contractors, based in India, were later fired.