Coinbase sued for privacy violation by Michael Massel

The renowned exchange platform Coinbase is being targeted by a lawsuit for allegedly violating the privacy of its customers. According to the complaint filed by Michael Massel, Coinbase illegally collected and stored fingerprints and facial scans of its users during KYC procedures. The plaintiff is seeking damages.

Coinbase targeted in lawsuit over user privacy breach

Coinbase, one of the biggest cryptocurrency exchange platforms, is at the center of a new controversy.

After recently filed a lawsuit against the SEC, the regulatory authority for the financial markets in the United States, Coinbase is now being sued for violating the privacy of its users.

May 1, Michael Massel, a user of Coinbase, filed a class action lawsuit accusing the platform of violating its customers’ privacy. According to the document filed in California District Court, Coinbase allegedly violated Illinois privacy laws by collecting fingerprints and facial scans.

Massel argues that the KYC (Know Your Customer) process of Coinbase is illegal under the Biometric Information Privacy Act (BIPA). The platform is alleged to have illegally collected, stored, used and shared personal data without authorization or compliance with legal requirements.

The BIPA Act requires companies that collect biometric data to obtain users’ permission and to provide them with the purposes, storage duration, use and destruction of the data. Coinbase would not have a written policy to that effect.

Coinbase did not have a written, publicly available policy establishing a retention schedule and guidelines for the permanent destruction of biometric information.

From the document

Coinbase would have used users’ data to improve its service

Michael Massel, the complainant, states that Coinbase used users’ personal data to improve its service and disclosed it to several companies, including Jumio Corporation, Solaris AG, Onfido, Inc., Au10tix LTD and Liquid Co. Ltd.

He therefore requested a compensation of $5,000 per violation of the law (BIPA), or $1,000 if the court finds that the alleged violations were not intentional.

It remains to be seen whether or not the accusations are true. In the meantime, Coinbase is thinking about leaving the United States due to difficult regulations for the crypto industry.