Apple is being sued for alleged negligence regarding its App Store security measures, after three users claim they collectively lost more than $1.8 million in a scam involving a fake cryptocurrency wallet available on the platform.
The lawsuit was filed on Friday in the U.S. District Court for the Northern District of California. The three plaintiffs — James Ramirez, Christopher Ellis, and Jalen Delgado — allege they downloaded an app called Sparrow Wallet from the App Store, believing it was the official Sparrow Bitcoin wallet. However, the legitimate wallet is not available on iOS, and the app they found was a fake.
According to the complaint, Ramirez lost approximately $875,000, Ellis around $840,000, and Delgado roughly $120,000. They transferred their Bitcoin to the fraudulent app and never recovered their funds.
The core of the lawsuit challenges one of Apple's main marketing arguments: that its tight control over the App Store makes the platform safer than rivals' alternatives. 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 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."
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 even after notifications.
Apple declined to comment on the lawsuit but 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 ecosystem analysis, which found that in 2025 it rejected more than 371,000 submissions that copied other apps, were spam, or otherwise misled users.
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.
This is not the first case of its kind against Apple. The company has faced similar lawsuits related to fraudulent apps on the App Store, including cryptocurrency scams. The case reignites the debate about big tech's responsibility in curating their app stores and the limits of the security claim that underpins Apple's closed business model.
The European Union, through the Digital Markets Act, is already pressuring Apple to allow alternative app stores and sideloading. This lawsuit could serve as another argument for regulators who advocate for opening up the ecosystem as a way to increase competition and transparency. The case also highlights the tension between Apple's closed-platform security claims and the practical reality of scam apps slipping through the review process, a contradiction that courts and regulators worldwide are increasingly scrutinizing.
Sources: TechCrunch, 9to5Mac, MacRumors
