Judge Pauses Proceedings Pending Key Appellate Court Ruling
A U.S. District Court judge in Illinois has granted a temporary stay in the biometric data lawsuit against Coinbase, citing the potential impact of a related case currently under review by an appellate court.
In a filing on Thursday, Judge Sharon Johnson Coleman of the Northern District of Illinois approved Coinbase’s request to pause litigation until the Seventh Circuit Court of Appeals issues a ruling in a case involving Nuance Communications and Charles Schwab over voice identification technology.
“The Court finds that the stay would simplify the issues and streamline the trial, reduce the burden of litigation on the Court and the parties, and would not unduly prejudice or tactically disadvantage Plaintiffs,” the order stated.
Details of the Coinbase Lawsuit
The lawsuit, filed in May, accuses Coinbase of violating the Illinois Biometric Information Privacy Act (BIPA) through the “wholesale collection” of facial data for its Know Your Customer (KYC) processes without proper notification or consent. Plaintiffs also allege that Coinbase shared biometric data with third-party verification providers, another violation of BIPA.
Under BIPA, companies found guilty of intentional violations can face fines of up to $5,000 per instance, while negligent violations carry penalties of $1,000 per occurrence.
Connection to Major Data Breach
The case adds to growing scrutiny on Coinbase’s data handling practices, following a May data breach in which customer support contractors allegedly accessed user account details and attempted to extort $20 million in Bitcoin. The company reported the breach and fired those involved, but it has faced multiple lawsuits related to data security failures.
Legal experts note that the Seventh Circuit’s decision in the Nuance case could set a precedent for how biometric privacy laws apply to technology providers, potentially shaping the outcome of the Coinbase litigation.
The court did not specify how long the stay will remain in place but indicated that proceedings would resume once the appellate ruling is issued.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.