Apple sued after alleged App Store crypto scam cost users $1.8M

Lawsuit Alleges Apple Negligence Over App Store Security

Apple is facing a lawsuit from three users who say they collectively lost more than $1.8 million after downloading a fraudulent crypto wallet from the App Store, challenging the company’s longstanding claims that its app review process keeps users safe from scams.

In a lawsuit filed on Friday in the U.S. District Court of Northern California, three plaintiffs claim they were tricked into downloading and installing a fraudulent crypto wallet app, leading them to collectively lose more than $1.8 million. The lawsuit centers on Apple’s claim that it secures its App Store by reviewing apps before they go live to protect users from fraudulent and malicious apps.

In this case, the plaintiffs downloaded an app called Sparrow Wallet, even though the official Sparrow Bitcoin wallet is not available on iOS. The plaintiffs transferred their Bitcoin to the fraudulent app, losing large amounts of the virtual currency, according to the complaint.

• Plaintiff James Ramirez lost about $875,000
• Plaintiff Christopher Ellis lost around $840,000
• Plaintiff Jalen Delgado lost roughly $120,000

Apple’s Marketing Claims Under Fire

The complaint targets one of Apple’s longtime competitive arguments: that its tight control over its App Store makes its platform safer than those offered by its rivals. The company has used this claim to push back against deregulation of the app ecosystem, including third-party app stores and sideloading.

“As part of a sustained marketing campaign, Apple has positioned itself, its products and services, as offering a level of security and trustworthiness superior to any competing technology company,” the new filing states. “This includes assurances about the safety of applications distributed through its App Store. By retaining exclusive control over which apps are permitted on Apple devices, Apple has structured its platform to ensure that consumers depend entirely on its promise of safety and reliability.”

Accusations of Knowingly Hosting Fraudulent Apps

The complaint also accuses Apple of knowingly hosting fraudulent apps, pointing to public criticism by Sparrow Bitcoin Wallet’s creator, Craig Raw, who said Apple had allowed fake Sparrow Wallet apps to remain on the App Store.

The three are asking for a trial by jury and seek to recoup their lost money and other damages. They also want Apple to provide warnings and disclosures about the App Store’s risks.

Apple’s Response

Apple declined to comment on the lawsuit. The company did stand behind its security measures, telling TechCrunch that apps impersonating others are a violation of its guidelines and it takes swift action to remove them. Apple added that there are currently no Sparrow Wallet copycats on the App Store. The company also pointed to its latest analysis of its ecosystem, which found that in 2025 it rejected more than 371,000 submissions that copied other apps, were spam, or otherwise misled users.