A judge in Illinois has hit the pause button on a lawsuit against Coinbase, a major US cryptocurrency exchange. The lawsuit claimed Coinbase broke Illinois’ Biometric Information Privacy Act (BIPA).
Waiting for Another Case to Decide
The judge agreed to Coinbase’s request to put the case on hold. Coinbase wants to wait for a ruling in a similar case involving Nuance Communications and Charles Schwab. This other case deals with voice identification technology and could set a precedent for how BIPA applies to financial companies, including crypto exchanges. The judge felt pausing the Coinbase case would make things simpler and less of a hassle for everyone involved.
The Original Lawsuit Against Coinbase
The lawsuit, filed in May 2025, accused Coinbase of collecting users’ biometric data (like faceprints) for its “Know Your Customer” (KYC) process without proper notification. The plaintiffs also said Coinbase improperly shared this data with outside verification companies. Under BIPA, companies can face hefty fines – up to $5,000 per intentional or reckless violation and $1,000 per negligent violation. The plaintiffs also wanted Coinbase to pay their legal fees.
Coinbase’s Data Security Issues
Coinbase has also faced criticism recently due to a separate security breach. Some customer support contractors in India accessed user data in exchange for bribes. While these contractors were fired, the incident raised serious questions about Coinbase’s data security practices and added to the pressure the company is facing.