Apple is facing a lawsuit in California after three customers claimed they lost a combined $1.8 million through a fake cryptocurrency wallet on the iOS App Store. Between May and August 2025, the app appeared on the Store as a supposed Sparrow Wallet application. Unwitting users didn’t realize the ruse, because Sparrow Wallet is a desktop-only software for Windows, macOS, and Linux.
Users who downloaded it were prompted to type in their seed phrases. Attackers then used those phrases to drain funds from their accounts. The three plaintiffs now suing lost $875,000, $840,000, and $120,000 in Bitcoin, respectively. They claim that while Apple markets the App Store as a “safe and trusted” marketplace, it is anything but.
How the Fake Wallet Spread and Evaded Detection
The App Store placed the fake app into its curated cryptocurrency collections, adding a sense of legitimacy. The store also failed to block alternative storefronts, in this case a Sparrow Wallet not from the official developer. Craig Raw, the official developer of Sparrow Wallet, testified that he spent years unsuccessfully flagging copycats on the Store. Ironically, Apple threatened to suspend his developer account when he attempted to upload a text-only app to warn iOS users that no mobile version existed.
Legal Charges and Demands
Apple now faces charges of false advertising and consumer law violations. The complainants are seeking Bitcoin reimbursement and punitive damages. They are also asking for a court order that would require Apple to issue explicit fake app warnings in the Store. Apple declined to comment on the active litigation. Its representatives, however, said the fraudulent app had been removed and its associated developer accounts terminated. They also reiterated the firm’s 2025 achievements: blocking over $2.2 billion in fake app transactions and shutting down 193,000 malicious developer accounts.
Recent Similar Incidents
Just three months ago, a similar incident surfaced when a fake version of Ledger Live drained $9.5 million from Mac users. That case, like this one, highlights how even curated app stores can still host dangerous software. For now, the lawsuit moves forward, and the crypto community watches closely to see if Apple will be held liable for the losses.
