Apple Faces $5 Million Class Action Lawsuit Over Fake Wallet That Led to Crypto Theft

September 21, 2021, 10:30 AM AEST - 3 weeks ago

Apple is facing a US$5 million class-action lawsuit from crypto investors after one of its applications allegedly enabled hackers to steal their coins.

The suit levels accusations of negligence, fraud and several computer-specific privacy torts against Apple. It details how hackers planted a phishing application disguised as a crypto wallet called “Toast Plus” in the tech giant’s App Store and lured unwitting users into installing a criminal portal on their devices.

For all intents and purposes, the app resembled a version of popular crypto wallet Toast Wallet but had no connection to it other than sharing a similar name.

According to the suit – filed on behalf of first plaintiff Hadona Diep – Apple is liable for all victims’ losses due to its failure to vet the application before placing it on the App Store. The compensation sought is specified in the complaint as upwards of US$5 million.

Diep, a resident of Maryland who describes herself as a “full-time cyber-security IT professional”, linked her private XRP key or seed phrase into Toast Plus only to later discover her crypto assets – a total of 474 Ripple (XRP) coins – had been drained.

Court documents show that as well as compensation, all class-action plaintiffs demand that Apple be prevented from allowing similar schemes to operate in its App Store in future.

Apple User Agreement Disclaimers Do Not Apply

Apple has yet to respond to the lawsuit or make any public comment on the matter, but it seems the disclaimers in its user agreement don’t apply in this case. The fact that Toast Plus was not an actual application, but instead a medium for the commission of fraud, makes any existing contract using it as subject matter void.

As the lawsuit points out:

While the App Store does have terms and conditions, including limitations on liability, those terms and conditions are the product of adhesion, in that consumers have no other practical ability to access applications for iPhones and iPads if they do not use the App Store; those terms and conditions are therefore not applicable to this case.

Class-action complaint, Diep v Apple Inc, Maryland District Court

Just last month, fake Ronin wallets were reported to be circulating on Google and Apple app stores. The bogus wallets were designed to trick users into giving up their account information, only to find their funds or collectibles removed soon thereafter.

Also last month, Apple announced the settlement of a separate class-action suit filed by US-based software developers, promising better terms for those who make the software that iPhone users run.

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