Coinbase Gets Sued Again, This Time for Biometric Data Collection Without Consent

Less than a week since Coinbase's hack, the crypto exchange is in the crosshairs again. This time, it's a class-action lawsuit filed by Illinois

Coinbase is being sued again, and this time it’s for allegedly collecting and transferring the biometric data of Illinois residents without their consent.

This breaches the Illinois Biometric Information Privacy Act (BIPA), according to the class-action lawsuit, which was filed on Monday.

The lawsuit claims that Coinbase asked users for a government ID and a selfie during the sign-up procedure. It’s a pretty standard process for a crypto exchange these days (unfortunately).

Here’s where the problems begin:

* Afterwards, Coinbase allegedly transmitted this data to third-party vendors (Solaris and Jumio) without the data subjects’ consent.

* It’s also alleged that Coinbase failed to inform the users how long it would store their biometric data for.

* Finally, the lawsuit claims that Coinbase didn’t obtain ‘a written release from the subject of the scan’ before transferring the data to third parties.

If this sounds familiar, that’s because it is. Back in May 2023, Coinbase was hit with an identical lawsuit from another Illinois resident.

By February 2025, the complainant and Coinbase agreed to undergo arbitration (a private ruling by an independent arbitrator, not a full court trial).

Back then, Coinbase argued that the user had consented to the data processing when checking the ‘I agree to the User Agreement and Privacy Policy’ box during the sign-up procedure. This allegedly breached the complainant’s justifications for the class action lawsuit.

Plus, the most important bit—another term the user had unwittingly accepted when checking that box is waiving his right to join a class-action lawsuit.

User Agreements never cease to surprise, right?

Storing your new crypto on Coinbase suddenly becomes somewhat sketchy. Exchange hacks also constantly threaten your asset security (see what happened with Bybit and 1inch).

Fortunately, solutions like Best Wallet solve this problem through self-custody, minimal data collection, and top-of-the-line encryption.

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Coinbase’s second screw-up in a row leaves a bad taste in the mouth. It’s sad to see how often data privacy and asset security are put on the back burner as exchanges pursue maximum profit.

The lesson is that the only person you can trust is yourself. And that’s exactly what self-custodial wallets like Best Wallet let you do—they put you in control of your data and funds and reward you for it.

Don’t forget to do your own research before investing in crypto and presales. The market is volatile and prone to immediate fluctuations. Only invest what you can afford to lose!