Coinbase user Michael Mussel filed a lawsuit against the company, stating that the procedures KYC on the exchange are contrary to US law.
The plaintiff alleges that the platform violated the Illinois Biometric Privacy Act (BIPA), which requires prior permission from customers when collecting data.
Coinbase, like other centralized exchanges, requires users to scan their ID and take a selfie to complete KYC. The company then uses this information to create a facial biometric template, which is needed to verify documents.
Mussel argues that this approach puts citizens’ personal data at risk in the event of a leak. He also insists that Coinbase destroy users’ biometrics immediately after successful verification.
According to the lawsuit, the exchange “had no written policy, available to the public, that established retention periods and guidelines for the irretrievable destruction” of such information.
The disgruntled user also demanded damages from the company in the amount of $5,000 for intentional violation of BIPA or $1,000 for unintentional actions.
Recall that on March 23, the US Securities and Exchange Commission (SEC) sent a notice to the exchange about an investigation regarding the listing procedure on the platform and its products – Coinbase Prime, Coinbase Wallet and the staking service Coinbase Earn.
In April, the company responded to the SEC claims by declaring its readiness to “resolutely defend itself.” Representatives of the exchange also noted that due to the proceedings, the regulator may suffer reputational damage.
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Coinbase user Michael Mussel filed a lawsuit against the company, stating that the procedures KYC on the exchange are contrary to US law.
The plaintiff alleges that the platform violated the Illinois Biometric Privacy Act (BIPA), which requires prior permission from customers when collecting data.
Coinbase, like other centralized exchanges, requires users to scan their ID and take a selfie to complete KYC. The company then uses this information to create a facial biometric template, which is needed to verify documents.
Mussel argues that this approach puts citizens’ personal data at risk in the event of a leak. He also insists that Coinbase destroy users’ biometrics immediately after successful verification.
According to the lawsuit, the exchange “had no written policy, available to the public, that established retention periods and guidelines for the irretrievable destruction” of such information.
The disgruntled user also demanded damages from the company in the amount of $5,000 for intentional violation of BIPA or $1,000 for unintentional actions.
Recall that on March 23, the US Securities and Exchange Commission (SEC) sent a notice to the exchange about an investigation regarding the listing procedure on the platform and its products – Coinbase Prime, Coinbase Wallet and the staking service Coinbase Earn.
In April, the company responded to the SEC claims by declaring its readiness to “resolutely defend itself.” Representatives of the exchange also noted that due to the proceedings, the regulator may suffer reputational damage.
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Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!
