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

Apple is being sued for alleged negligence regarding its App Store security measures. In a lawsuit filed 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 suit centers on Apple’s claim that it secures the App Store by reviewing apps before they go live to protect users from fraudulent and malicious software. According to the complaint, the plaintiffs downloaded an app called Sparrow Wallet — even though the official Sparrow Bitcoin wallet is not available on iOS — and transferred their Bitcoin to the fraudulent app, losing large amounts of the virtual currency. Plaintiff James Ramirez lost about $875,000; plaintiff Christopher Ellis lost around $840,000; and plaintiff Jalen Delgado lost roughly $120,000.

The complaint takes aim at one of Apple’s longtime competitive claims: that its tight control over the App Store makes its platform safer than rivals’ — an argument the company has used to push back against deregulation of the app ecosystem, including third-party app stores and sideloading. The filing states that Apple has marketed itself as offering a level of security and trustworthiness superior to any competing technology company, including assurances about App Store application safety. “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 filing states.

The complaint also accuses Apple of knowingly hosting fraudulent apps, pointing to public criticism from Sparrow Bitcoin Wallet’s creator, Craig Raw, who has said Apple allowed fake Sparrow Wallet apps to remain on the App Store. The three plaintiffs are seeking a jury trial, damages to recoup their losses, and a requirement that Apple provide warnings and disclosures about App Store risks. Apple declined to comment on the lawsuit but defended its security measures, telling TechCrunch that apps impersonating others violate its guidelines and that it takes swift action to remove them; the company said there are currently no Sparrow Wallet copycats on the App Store, and pointed to its latest ecosystem analysis, which found it rejected more than 371,000 submissions in 2025 for copying other apps, spam, or otherwise misleading users.

Why it matters

The suit challenges the security argument Apple has long used to resist mandated sideloading and third-party app stores — if courts find the App Store’s review process didn’t deliver on that promise, the case could weaken Apple’s standing in the broader fight over app-distribution rules.