Apple Sued Over Alleged App Store Crypto Scam That Cost Users $1.8M

Apple Inc. has been sued for alleged negligence related to its App Store security measures. The lawsuit, filed on Friday in the U.S. District Court of Northern California, involves three plaintiffs who claim they were tricked into downloading and installing a fraudulent crypto wallet app, resulting in combined losses exceeding $1.8 million.

The app in question was called Sparrow Wallet, even though the official Sparrow Bitcoin wallet is not available on iOS. According to the complaint, the plaintiffs transferred their Bitcoin to the fraudulent app, losing significant amounts of the cryptocurrency. Plaintiff James Ramirez lost approximately $875,000; Christopher Ellis lost about $840,000; and Jalen Delgado lost roughly $120,000.

The lawsuit targets one of Apple's long-standing competitive arguments: that its tight control over the App Store makes its platform safer than those of its rivals. Apple 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 filing states. "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."

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 plaintiffs 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 declined to comment on the lawsuit. However, the company stood behind its security measures, telling TechCrunch that apps impersonating others violate its guidelines and that 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.