In the latest development, an Illinois judge has granted a motion to pause proceedings in a lawsuit against US-based cryptocurrency exchange Coinbase. This decision would suspend further actions in the crypto company’s court case involving alleged violations of the state’s Biometric Information Privacy Act (BIPA).
How Another Case Could Decide The Outcome Of Coinbase Lawsuit
According to an August 21 filing in the US District Court for the Northern District of Illinois Eastern Division, Judge Sharon Johnson Coleman approved a motion submitted by Coinbase to stay a lawsuit accusing the exchange of violating the state’s Biometric Information Privacy Act. The motion asked the court to wait for a ruling from the US Court of Appeals for the Seventh Circuit on a similar case.
The Court of Appeals case involves Nuance Communications and Charles Schwab, with the intricacies around supplying voice identification technology forming the foundation of the legal battle. The decision from this particular lawsuit could set precedent for how BIPA affects financial service providers, including cryptocurrency exchanges.
The court document read:
[T]he 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 lawsuit, filed in May 2025 by a group of users, accused Coinbase of the “wholesale collection” of biometric data for its Know Your Customer (KYC) requirements without notifying the users, thereby violating the Illinois law. The plaintiffs also alleged that the crypto company inappropriately shared the faceprints with third-party verification providers.
Under Illinois’ Biometric Information Privacy Act, private firms or organizations can face damages of up to $5,000 for each instance of reckless or intentional violation of the law and $1,000 per negligent violation of the BIPA. The plaintiffs also sought relief to cover their legal costs.
Coinbase Under Pressure From Data Security Breach
Due to a separate incident, Coinbase has been under scrutiny over the security of customer data. The crypto company revealed in May that a group of customer support contractors in India accessed account data for users in exchange for bribes.
While the customer contractors were eventually dismissed, the individuals behind the data breach tried to extort $20 million in Bitcoin from Coinbase. Ultimately, this incident has put Coinbase under pressure and called into question its process of handling personal user data.
