The major exchange Coinbase is accused of improperly storing and using its users’ biometric data. CEO Brian Armstrong has been clear on the subject: if the SEC were to sue Coinbase after the issuance of a wells notice, he and his team will emerge victorious.
The complaint was filed on May 1 in a California court. Indeed, Coinbase is being sued by Michael Massel for allegedly collecting users’ biometric data illegally. The plaintiff seeks payment of damages for all intentional and reckless violations at $5,000 per violation. He also seeks $1,000 for any other violations of the Illinois Biometric Information Privacy Act (BIPA).
In other words, the plaintiff accuses Coinbase of illegally obtaining, storing and using biometric data. That is, users’ facial recognition and fingerprints.
According to the accusation, Coinbase did not comply with the rules in force: any company collecting this type of data must indeed inform the person that it collects them, the duration for which it will store them, as well as the use that is made of them. It is also necessary for the company to explain how it will destroy the data once it is stored.
This complaint against Coinbase comes at a time when the platform is experiencing other problems against the SEC. As a reminder, Coinbase’s shares fell nearly 13% to $67.33 on March 25 in extended trading after the company said the regulator had issued it a Wells Notice: a formal statement that the SEC staff intends to recommend enforcement action.
That’s because the Securities and Exchange Commission (SEC) has warned it for alleged securities law violations related to its staking services.
Recently, the platform launched an offshore exchange in Bermuda after obtaining a license for its operations.