Coinbase’s Face Scandal?! 😱

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Ah, Coinbase, that glittering temple of digital fortune, now finds itself entangled in the murky depths of an Illinois courtroom. It seems the long arm of the law, ever suspicious of such novelties, seeks to unravel the very fabric of their Know Your Customer checks. Is it justice, or merely the gnawing suspicion that anything new must be inherently sinful? 🤔

A chorus of Coinbase customers, their faces etched with the digital equivalent of existential dread, has risen to accuse the platform. They claim that Coinbase, in its relentless pursuit of verification, has improperly collected and stored their facial data. One might ask, is this the price of progress? Or a descent into a dystopian future where even our faces are commodities? 🎭

The lawsuit, a veritable tome of legal lamentations, was filed in the U.S. District Court for the Northern District of Illinois on May 13. It alleges that Coinbase’s Know Your Customer checks involve scanning users’ facial geometry without proper notice or consent. Oh, the audacity! To peer into the very soul of a man (or woman) without so much as a by-your-leave! The plaintiffs, those brave souls, claim this directly breaches Illinois’ biometric privacy laws. ⚖️

According to the complaint, users were compelled to offer up a government-issued ID and a selfie, sacrifices to the digital gods of verification. These images were then subjected to the scrutiny of third-party facial recognition software. One wonders, do these algorithms dream of electric sheep? Or merely of identifying the next hapless customer? 🐑

The group, a motley crew of digital dissidents, claims this process captured their biometric identifiers, such as faceprints, without prior written notice. Imagine, your face, your very essence, captured and cataloged without so much as a ‘thank you.’ And without a publicly available “retention schedule or guidelines” for data destruction, as required under BIPA. Is this not a tragedy of modern proportions? 😢

“[…] At no point during the Verification Process are Coinbase users asked to consent to the collection of their biometric information, notified that their biometric data will be collected by an unrelated third party, nor provided with any information about the process, how it works, the type of information and data collected, whether said data is stored or disclosed to other entities, or any information about the retention or destruction of their biometric information.”

Bernstein v. Coinbase Global, Inc.

The complaint further reveals that Coinbase transmitted facial data to third-party vendors, including Jumio, Onfido, Au10tix, and Solaris, without obtaining explicit permission. A clandestine exchange of faces, like some macabre digital market. One shudders to think what becomes of these digital likenesses in the shadowy corners of the internet. 👻

And the plot thickens! It seems that more than 10,000 individuals have filed for arbitration over these issues, only to be met with… silence. Coinbase has allegedly failed to pay the necessary arbitration fees, resulting in many of those cases being dismissed. A Kafkaesque nightmare of bureaucratic indifference! Is this justice, or merely the sound of coins jingling in the pockets of the powerful? 💰

That being said, the group, emboldened by their righteous indignation, is pushing for financial penalties of up to $5,000 per reckless violation, or $1,000 where negligence is found. A paltry sum, perhaps, for the loss of one’s digital soul, but a start nonetheless. Plus legal expenses and injunctive relief. 💸

Coinbase, ever the stoic giant, has not publicly commented on the lawsuit at the time of writing. Perhaps they are too busy counting their digital gold, or perhaps they are simply waiting for the storm to pass. Time will tell. ⏳

Interestingly, this isn’t the first time Coinbase has found itself in the crosshairs over alleged BIPA violations in Illinois. As previously reported by crypto.news, a class-action lawsuit filed by a local in May 2023 targeted the exchange over its collection of facial data and fingerprint templates through its mobile app. A pattern emerges, doesn’t it? 🤔

That case was eventually paused after a judge, perhaps weary of the digital deluge, approved Coinbase’s motion to move the dispute into arbitration. The lawsuit was dismissed without prejudice in February this year, after both parties agreed to drop the case. A temporary reprieve, perhaps, but the specter of legal trouble continues to haunt the exchange. 👻

Making matters worse, like a dark cloud gathering on the horizon, Coinbase has also come under fire over a recent data breach involving customer support agents allegedly bribed to leak user data. At least six related lawsuits have since been filed, intensifying scrutiny over the platform’s handling of sensitive information. Oh, the tangled web we weave when first we practice to deceive! 🕸️

In other news, Illinois recently dropped a separate lawsuit against Coinbase over its staking program, following similar moves by Kentucky, Vermont, and South Carolina after the SEC dismissed its own case. A glimmer of hope, perhaps, in this otherwise bleak landscape. But can it truly atone for the sins of the past? Only time, and the relentless march of legal proceedings, will tell. ⚖️

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2025-05-19 12:14