On Monday, October 19, 2026, Law360 reported that Apple asked a California federal judge to dismiss a lawsuit accusing the company of failing to warn consumers about fraudulent cryptocurrency wallet apps on its App Store and the theft risk those apps posed.
In a motion filed Friday, Apple requested dismissal with prejudice. The company contends the suit improperly seeks to hold it liable for the actions of third-party criminals, and that the claims rest on “generalized statements” about the App Store and its app review and vetting process.
The consumers filed the suit in July. They allege they relied on Apple’s assurances that the App Store is a safe marketplace when they downloaded what proved to be a spoof of Sparrow, a bitcoin digital wallet app. According to the complaint, the version they installed was built solely to misappropriate users’ funds.
The plaintiffs say they collectively lost more than $1.83 million when the fraudulent app drained their cryptocurrency holdings. They further allege Apple did not devote adequate attention and oversight to reviewing and monitoring apps distributed through its App Store.
In its motion, Apple noted that the plaintiffs do not claim the company took part in the scam or received any of the stolen funds. It said the claims instead hinge on a theory that its general descriptions of the protective measures and review process it uses for the App Store were false and misleading. Apple called that theory deficient in numerous respects.
The company argued that the challenged statements do not specifically concern Sparrow and amount to general descriptions of its review process. It said such statements are not actionable and do not guarantee protection against all possible instances of third-party fraud. Apple also pointed out that the plaintiffs themselves cite public statements in which the company acknowledged that some apps may be vulnerable to malicious activity by independent bad actors.
Apple also invoked the Communications Decency Act, arguing the law bars all of the misrepresentation claims by shielding the company from liability for general statements about the content moderation policy governing its App Store.
Beyond that, Apple said the complaint fails to allege that any of the plaintiffs’ injuries occurred in California, that Apple caused any ascertainable losses, or that it owed consumers a duty to warn them of third-party criminal conduct. It maintained that materials incorporated by reference into the complaint show it did disclose the risk the plaintiffs say it concealed. As for the product liability theories, Apple argued they fail as a matter of law because the App Store is not a “product” and the plaintiffs do not plausibly allege a defect.
As a threshold matter, Apple asserted that the plaintiffs lack standing and cannot trace their injuries to its conduct. The motion said that, by the plaintiffs’ own account, third-party cybercriminals caused their losses, including the theft of cryptocurrency through Sparrow. It added that no causal link exists between any Apple statement and the alleged injuries, because none of the plaintiffs specify which representations, if any, they reviewed before downloading the app.
In a statement to Law360 on Monday, Daniel Thornburgh of Aylstock Witkin Kreis & Overholtz PLC, who represents the plaintiffs, said Apple wants to blame the criminals and end the inquiry there, but that approach ignores the company’s own conduct. He said Apple told consumers that App Store applications were carefully vetted, yet, as the complaint alleges, did not remove the fraudulent Sparrow app after being put on notice that malicious applications were available and that customers had already been harmed.
Thornburgh said Apple built the App Store on consumer trust and cannot ask users to rely on its safeguards while disclaiming responsibility, particularly where it knew or should have known those safeguards had failed. “We intend to hold Apple accountable,” he said.
Source: Law360
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