Judge May Stay Coinbase Biometric Lawsuit Pending Seventh Circuit Ruling, Could Impact Bitcoin Breach Claims

• Stay granted: Federal court paused BIPA claims against Coinbase awaiting Seventh Circuit guidance.

• Core allegation: alleged “wholesale collection” of faceprints for KYC and sharing with verification vendors without notice.

• Impact: potential statutory damages up to $5,000 per intentional violation; outcome may set broader precedent for biometric claims.

Meta description: Coinbase biometric lawsuit paused under BIPA pending appellate ruling — learn implications, damages, and steps users can take. Read now.

The judge suggested that a brief stay while awaiting a ruling in a similar appellate case could “reduce the burden of litigation.”

An Illinois federal judge has stayed a biometric lawsuit against Coinbase pending a Seventh Circuit ruling that may affect how BIPA applies to third‑party verification services.

The US District Court for the Northern District of Illinois, Eastern Division, granted Coinbase’s motion to pause proceedings. The stay awaits a decision in a Seventh Circuit case concerning Nuance Communications’ voice identification work for Charles Schwab, which could clarify the law’s scope for vendors and platforms.

What is the Coinbase biometric lawsuit?

The Coinbase biometric lawsuit alleges that the exchange captured and stored users’ faceprints for Know Your Customer (KYC) checks without providing the notices required under Illinois’ Biometric Information Privacy Act (BIPA). Plaintiffs claim Coinbase shared biometric data with third‑party verification providers without consent.

How did the court justify the stay?

Judge Sharon Johnson Coleman found the stay would simplify issues and streamline the trial, reducing the litigation burden on the court and parties. The order stated the stay is unlikely to unduly prejudice plaintiffs and could prevent redundant proceedings if the appellate decision clarifies vendor liability under BIPA.

Source: US District Court for the Northern District of Illinois, Eastern Division

Why does the Nuance–Schwab appeal matter to Coinbase?

The Seventh Circuit case examines whether a vendor that supplies identification technology can be liable under BIPA for biometric collection when acting on a client’s behalf. That ruling could determine whether platforms or their verification vendors bear primary responsibility for obtaining consent and providing notices.

What are plaintiffs alleging about Coinbase’s practices?

Plaintiffs say Coinbase engaged in a “wholesale collection” of faceprints for its KYC processes without notifying users as BIPA requires. They also allege biometric data was shared with third‑party verification vendors without informed consent, forming the basis for statutory damages and litigation expense claims.

When did related data‑security incidents occur?

In May 2025, Coinbase disclosed that contractors accessed user account data and attempted extortion for 20 million USD in Bitcoin. Those contractors were later terminated. The breach prompted additional suits alleging mishandling of personal data, which remain separate but related in claims about Coinbase’s data practices.

How much can plaintiffs recover under BIPA?

What could a favorable appellate ruling change?

If the Seventh Circuit narrows vendor liability or clarifies vendor‑client roles, courts may dismiss or limit claims against platforms like Coinbase or against verification providers. Conversely, an expansive ruling could increase exposure for companies that collect or transmit biometric identifiers without BIPA compliance.

Frequently Asked Questions

Can Coinbase be held liable under BIPA if a vendor collected the biometric data?

Liability depends on whether the court finds Coinbase exercised control or direction over collection and whether required notices and consent were provided. The Seventh Circuit decision in a related case will help define those boundaries.

What immediate actions can affected users take?

Users should review account communications, request records of biometric collection, and consult legal counsel if they believe BIPA notices or consent were missing. Preserving evidence and timestamps is important for any future claim.

Key Takeaways

• Stay issued: Litigation is paused pending a Seventh Circuit ruling that could be precedent‑setting.
• BIPA exposure: Potential statutory damages up to $5,000 per intentional violation highlight significant financial risk.
• User steps: Check account records, request data logs, and consult counsel if you suspect noncompliant biometric collection.

Conclusion

The Coinbase biometric lawsuit has been stayed to await appellate guidance that may clarify vendor versus platform liability under Illinois’ Biometric Information Privacy Act. Stakeholders should monitor the Seventh Circuit decision closely, as its outcome could reshape compliance obligations for crypto platforms and identity‑verification vendors. COINOTAG will update this report as developments occur.

Published: 2025-08-22 | Updated: 2025-08-22 | Author: COINOTAG