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

Apple is being sued by three users who claim they lost a combined $1.8 million after downloading a fake cryptocurrency wallet app from the App Store. The lawsuit, filed in a California federal court, alleges that Apple’s app review process failed to prevent the scam, contradicting the company’s marketing that the App Store is a safe and trusted marketplace.

The plaintiffs say they downloaded a counterfeit version of the legitimate wallet app “Coinbase” from the App Store in February 2023. The fake app, which appeared to be a genuine Coinbase wallet, tricked users into entering their private keys, allowing scammers to drain their cryptocurrency holdings. The three victims lost $1.8 million in total, according to the complaint.

The lawsuit matters because it challenges Apple’s long-standing claim that its rigorous app review process protects users from malicious software. Apple has repeatedly touted the App Store as a secure platform, and the company takes a 30% commission on many in-app purchases, partly justifying the fee as covering the cost of security. If the court finds Apple liable, it could force the company to tighten its review procedures or face greater legal exposure for third-party scams.

The source text does not specify the exact dates of the lawsuit filing or the names of the plaintiffs. It notes that the fake app was available on the App Store for several days before being removed. Apple has not publicly commented on the lawsuit.

Background: This is not the first time Apple has faced criticism over App Store security. In 2022, a similar scam involving fake cryptocurrency apps was reported, and Apple has previously settled lawsuits over fraudulent apps. The company has also been under regulatory scrutiny in the EU and the US over its App Store policies.

Next steps: The court will likely hear Apple’s motion to dismiss the case. If the lawsuit proceeds, it could lead to discovery revealing how the fake app passed Apple’s review. The outcome may influence future App Store security measures and Apple’s liability for third-party content.