US court grants brief stay in Coinbase biometric-data lawsuit

An Illinois federal judge has put a lawsuit against cryptocurrency exchange Coinbase on hold, granting a temporary stay while the courts await a related decision at the appellate level. The pause was requested by Coinbase and approved by the U.S. District Court for the Northern District of Illinois.

The company asked the court to wait for a ruling from the U.S. Court of Appeals for the Seventh Circuit in a separate case involving Nuance Communications and voice-identification technology supplied to Charles Schwab. The outcome in that appeal could affect the legal issues raised in the Coinbase dispute, the filing said.

The district judge concluded that pausing the case now would simplify and narrow the issues for trial, reduce the parties’ and the court’s litigation burden, and would not unfairly prejudice the plaintiffs.

The suit, filed in May, alleges that Coinbase collected users’ facial biometric identifiers for know‑your‑customer (KYC) checks without adequately notifying them and that the exchange shared those biometric data with third‑party verification providers without consent. The plaintiffs say those practices violate Illinois’ Biometric Information Privacy Act (BIPA).

Under BIPA, private entities found to have violated the statute in an intentional or reckless manner can face statutory damages up to $5,000 per violation, with lower penalties available for negligent breaches; the plaintiffs are also seeking recovery of litigation costs.

The case follows a high‑profile incident earlier in the year in which a group of customer‑support contractors accessed Coinbase user data and attempted to extort roughly $20 million in Bitcoin. Those contractors were later terminated, and the breach prompted multiple lawsuits alleging mishandling of personal information.

With the stay in place, proceedings against Coinbase will be paused until the appellate decision is issued or the district court lifts the stay.

Source: Cointelegraph