Apple is facing a lawsuit after three users say a fake version of the Sparrow Wallet app on the App Store drained their Bitcoin holdings. The complaint, filed this week, alleges the counterfeit app siphoned more than $1.8 million in total.
How the fake wallet worked
The fraudulent app mimicked the real Sparrow Wallet, a popular self-custody Bitcoin wallet. Users downloaded it from the official App Store, believing it was legitimate. Once they entered their seed phrases or private keys, the app sent those credentials to the attackers, who then emptied the wallets. The plaintiffs say they lost their entire Bitcoin balances.
Apple's App Store vetting under scrutiny
The lawsuit questions Apple's review process. The fake app was available for download for some time before being removed. The plaintiffs argue Apple failed to catch the impersonation, despite its claims of rigorous app screening. This isn't the first time a fake crypto wallet has slipped through — similar incidents have hit other exchanges and wallet providers in recent years.
What the plaintiffs are seeking
The three users are asking for compensation for their losses, plus a court order requiring Apple to tighten its app review procedures for crypto-related apps. They want the company to implement better verification measures to prevent lookalike apps from reaching users.
What happens next
Apple has not yet filed a formal response. The case is now before the court, and a hearing is expected in the coming weeks. The outcome could set a precedent for how much responsibility app store operators bear for fake apps that steal cryptocurrency.
