San Francisco-based cryptocurrency exchange Coinbase faces legal action over allegations that it collected and stored biometric data without obtaining proper consent from its users. The lawsuit, which was filed in federal court in California, is seeking class-action status on behalf of all users affected by the alleged data collection.
According to the lawsuit, Coinbase’s mobile app required users to provide facial recognition and fingerprint scans as part of the company’s two-factor authentication process. However, the lawsuit claims that Coinbase did not properly inform users that it was collecting and storing their biometric data, nor did it obtain their consent to do so.
Allegations of Improper Consent and Violation of Biometric Privacy Law
The lawsuit also alleges that Coinbase violated the Illinois Biometric Information Privacy Act, which requires companies to obtain written consent from users before collecting their biometric data. The law also requires companies to develop a publicly available policy outlining how they will handle and protect such data.
The Illinois law is considered one of the most stringent biometric privacy laws in the United States. Companies that violate the law can face fines of up to $5,000 per violation or $1,000 for each negligent violation.
Coinbase has not yet publicly commented that it faces legal action. However, the company has previously stated that it uses biometric data for security purposes and that it stores such data in compliance with applicable laws and regulations.
Biometric Data Collection Concerns in Technology Companies
The lawsuit against Coinbase comes amid growing concerns about the collection and use of biometric data by technology companies. Biometric data, which includes fingerprints, facial recognition scans, and other physical identifiers, is increasingly being used as a form of authentication for a wide range of digital services, from banking apps to social media platforms.
However, privacy advocates have raised concerns about the collection and storage of such data, particularly in cases where companies do not obtain proper consent from users. There are also concerns that biometric data can be used for tracking and surveillance purposes, potentially putting individuals’ privacy and security at risk.
Other Companies That Faced Legal Action Over Biometric Data Collection
Several other technology companies have faced legal action over their handling of biometric data. In 2020, for example, the social media platform TikTok was hit with a class-action lawsuit alleging that it collected and stored biometric data without obtaining proper consent from users.
In response to such concerns, some states have introduced laws to regulate the collection and use of biometric data. In addition to Illinois, states, including Texas and Washington, have also passed biometric privacy laws in recent years.
Need for Transparency and Proper Consent for Biometric Data Collection
The lawsuit against Coinbase highlights the need for companies to be transparent about their collection and use of biometric data and to obtain proper consent from users before collecting such data. It also highlights the potential legal and financial risks that companies can face if they violate biometric privacy laws.
As more and more services rely on biometric authentication, it is likely that there will be increased scrutiny of how companies collect and use such data. It is important for companies to take a proactive approach to privacy and security and to ensure that they are complying with all applicable laws and regulations.
In conclusion, Coinbase faces legal action over allegations that it collected and stored biometric data without obtaining proper consent from its users. The lawsuit highlights the need for companies to be transparent about their collection and use of biometric data, and to obtain proper consent from users before collecting such data. As the use of biometric authentication becomes more widespread, it is important for companies to take a proactive approach to privacy and security, and to ensure that they are complying with all applicable laws and regulations.