A federal judge in Illinois has granted Coinbase’s request to pause a lawsuit accusing the cryptocurrency exchange of violating the state’s biometric privacy law, pending a ruling in a related case before the U.S. Court of Appeals for the Seventh Circuit.
In a filing Thursday, U.S. District Judge Sharon Johnson Coleman said the stay would simplify issues, reduce litigation burdens, and not unfairly disadvantage the plaintiffs. The decision temporarily halts a case alleging Coinbase violated Illinois’ Biometric Information Privacy Act (BIPA) by collecting and sharing users’ faceprints without proper notice or consent as part of its identity checks.
The plaintiffs, a group of Coinbase users, claim the exchange engaged in “wholesale collection” of biometric data and improperly shared it with third-party verification providers. Under Illinois law, companies can face damages of up to $5,000 per reckless or intentional violation and $1,000 per negligent violation, in addition to covering legal costs.
Coinbase sought the stay while the Seventh Circuit considers a case involving Nuance Communications and Charles Schwab, where voice identification technology is at issue. That decision could set precedent for how BIPA applies to financial services firms.
Coinbase is also facing pressure over data security. In May, the company revealed that contractors in India had accepted bribes to leak account information. Those workers were dismissed, but the breach triggered lawsuits alleging mishandling of customer data.
The group behind the breach later tried to extort $20 million worth of bitcoin from the exchange, which Coinbase refused.
The Illinois case adds to Coinbase’s ongoing legal battles as it faces scrutiny from regulators and courts over privacy, compliance, and security practices in the U.S.
