Apple faces lawsuit after fake Bitcoin wallet drained $1.8M from App Store customers
Apple accused of misleading customers.
Pedestrian uses a smartphone while walking past an Apple retail store. Cheng Xin/Getty.
- Three plaintiffs sued Apple after a fake Sparrow Wallet app allegedly stole $1.835 million in Bitcoin.
- The plaintiffs say Apple misled users by claiming App Store apps are rigorously reviewed, trustworthy, and secure.
- Apple said it removed apps impersonating Sparrow Wallet and terminated related developer accounts.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
Three plaintiffs have sued Apple for hosting a fraudulent Bitcoin wallet in the App Store called Sparrow Wallet, through which they allegedly lost $1.8 million.
According to court filings, Apple has been making false and misleading claims about the safety and integrity of the App Store.
The tech company has repeatedly claimed that all apps that are available in the App Store are rigorously reviewed, trustworthy, and secure, thus encouraging users to have faith in Apple’s review process.
With this in mind, they searched the App Store for a legitimate Bitcoin wallet called Sparrow Wallet. But instead of downloading the genuine application, the plaintiffs installed a spoofed application.
The fake app asked the victims to enter their wallet recovery seed phrase. Once this was entered, the scammers immediately transferred the plaintiffs’ cryptocurrency into wallets they controlled. Combined they lost a total of $1.835 million.
The plaintiffs feel that Apple is liable for their losses because of the App Store’s safety claims.
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“Despite its extensive marketing efforts, Apple has failed to devote the necessary attention and oversight to adequately review and monitor applications distributed through the App Store. This failure has allowed cybercriminals to exploit the trust, and reputation, Apple has cultivated, resulting in the theft of funds from Apple’s own customers,” the plaintiffs state.
They are asking the US District Court for the Northern District of California for punitive damages for their losses. In addition, they seek a court order requiring Apple to provide clearer warning about cryptocurrency apps and stop making misleading statements about the App Store’s safety.
In response to a request for comment from MacRumors, an Apple spokesperson told the tech site that it has taken swift action to remove any apps impersonating Sparrow Wallet on the App Store and to terminate developer accounts associated with those apps.
