Apple Sued Over Fake Crypto Wallet in the App Store: $1.8M in Losses

Apple is facing a lawsuit alleging negligence tied to App Store security. On Friday, three plaintiffs filed suit in the U.S. District Court for the Northern District of California, claiming they were tricked into installing a fake cryptocurrency wallet and, as a result, lost a combined total of more than $1.8 million.

At the heart of the case is Apple's long-standing claim that its up-front app review protects users from fraudulent and malicious software. According to the plaintiffs, they downloaded an app called Sparrow Wallet, even though no official Sparrow Bitcoin wallet for iOS exists at all. After transferring their bitcoin into an account in the fake app, they lost substantial sums: James Ramirez roughly $875,000, Christopher Ellis about $840,000, and Jalen Delgado around $120,000.

A Blow to Apple's Central Argument

The lawsuit strikes at one of the company's key marketing points: that tight control over its app store supposedly makes the platform safer than its competitors'. It is precisely this argument that Apple has used for years to fend off demands to open up its ecosystem — to allow third-party stores and app installs that bypass the App Store.

“As part of a consistent marketing campaign, Apple has positioned itself, its products, and its services as providing a level of security and reliability superior to any competing technology company,” the complaint states. By retaining exclusive control over which apps are allowed onto devices, the plaintiffs argue, Apple has built the platform so that consumers depend entirely on its security promises.

The plaintiffs also accuse Apple of knowingly hosting fraudulent apps. In support, they cite public criticism from Craig Raw, the creator of the real Sparrow Bitcoin Wallet, who said Apple allowed fake versions of the wallet to remain in the store.

The three claimants are demanding a jury trial, the return of their lost funds, and damages. In addition, they want Apple to add warnings and disclose information about App Store risks.

Apple's Response

The company declined to comment on the lawsuit itself but defended its security measures. Apple told TechCrunch that apps impersonating others violate store rules and that such programs are removed promptly. According to the company, there are currently no copies of Sparrow Wallet in the App Store. Apple also pointed to its own statistics: in 2025, it rejected more than 371,000 submissions that copied other apps, were spam, or misled users.

Source: TechCrunch