Apple is facing a lawsuit in California after three customers claimed to have lost a combined total of $1.8 million through a fake cryptocurrency wallet on the iOS App Store.
Between May and August 2025, the application ran on the App Store as a supposed Sparrow Wallet application. Unwitting users failed to notice the ruse, as Sparrow Wallet is a desktop-only software for Windows, macOS, and Linux.
Users who downloaded it were prompted to type in their seed phrases, which attackers then used 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.
For one, the App Store placed the fake app into its curated cryptocurrency collections, adding validation to its credibility. The Store also neglected to block alternative storefronts, in this case a Sparrow Wallet not from the official developer.
Craig Raw, the official developer of the Sparrow Wallet, testified that he unsuccessfully spent years 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.
Apple now faces charges of false advertising and consumer law violations, with the complainants seeking Bitcoin reimbursement and punitive damages. The plaintiffs are also seeking a court order requiring 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.
Just three months ago, a similar incident surfaced when a fake version of Ledger Live drained $9.5 million from Mac users.
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