A federal judge in California has ruled that Apple Inc. is shielded from the “Toast Plus” class action lawsuit where a fake crypto wallet app was available in the Apple App Store. After downloading the fake app, a customer filed suit against the tech company and was able to recover some of his crypto.
Apple not liable for losses after customer downloaded fake crypto app
Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California has ruled that Apple Inc. is not liable in a class action lawsuit where a fraudulent cryptocurrency wallet app was available for download on the company’s app store, Bloomberg reported Tuesday.
Hadona Diep was a crypto investor who accused Apple to hosting a fraudulent mobile app. It mimicked Toast Plus, a legal XRP wallet. This fake app was identical in name and design to the legitimate one. A class action suit was filed against Tech giants in Maryland in September 2013. The case was transferred to Northern District of California, December.
Plaintiff alleged that he downloaded the Apple App Store fake app and then used it to transfer approximately 474 coins from Bittrex’s crypto exchange Bittrex into a Rippex wallet.
The plaintiff was able to access her coins using other wallets even though Rippex closed down in February 2018. The plaintiff then “linked her private XRP key, or a seed phrase, into Toast Plus in March of 2021.” However, when she checked her Toast Plus account in August 2021, she discovered that her account was deleted in March 2021 and her deposited XRP coins were nowhere to be found.
Diep claimed that he suffered damages of more than $5,000 as a consequence of Apple hosting the malicious crypto wallet app. Ryumei Nakao is her co-plaintiff and claims he suffered a loss of $500,000.
Hamilton agreed with Apple and said that Apple could not be held accountable for creating the fake application. Apple is immune under Section 230 of the Communications Decency Act because it is considered a publisher of the content provided by another content provider, not a creator, according to Hamilton’s Sept. 2 ruling.
The judge also agreed with Apple that Diep did not successfully plead claims under both California’s and Maryland’s Consumer Privacy Acts because she did not allege specific details of the time, place, and content of the alleged false representations.
Moreover, Diep’s claims must be dismissed because under Apple’s terms and conditions, the company is not liable for damages arising out of or related to the use of third-party apps, the ruling details.
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