Apple is facing a federal lawsuit from three users who say counterfeit Sparrow Wallet applications made available through the App Store led to roughly $1.835 million in Bitcoin losses in 2025. The plaintiffs contend they trusted the downloads because Apple presents the App Store as a reviewed and reliable marketplace.
Alleged losses tied to spoof apps
According to the complaint, the three users each downloaded an application presented as Sparrow Wallet, a Bitcoin wallet brand, and later had funds transferred to addresses controlled by attackers. The lawsuit says the software asked users to enter their wallet seed phrases, which would give anyone controlling the malicious app the ability to access the associated Bitcoin.
The filing describes separate incidents over several months. Delgado allegedly downloaded a spoof app around May 1, 2025 and lost about $120,000. Ramirez is said to have downloaded another fake version on July 25 and lost 7.4 BTC, valued at about $875,000. Ellis allegedly used the app around August 3 and lost roughly $840,000. Together, the claimed losses total about $1.835 million.
What Sparrow Wallet offers
The case centers on the use of Sparrow Wallet’s name by unauthorized apps. Sparrow’s official website describes the product as a desktop Bitcoin wallet. Its current download page lists versions for macOS, Windows and Linux, but does not offer an iOS version.
That detail is significant to the plaintiffs’ claims because the apps in question were distributed through Apple’s mobile app marketplace. The complaint alleges that, despite Sparrow not offering an iPhone version, impersonating apps were able to appear on the App Store and obtain users’ recovery phrases before draining funds.
Apple’s response
Apple told MacRumors it moved quickly to remove the apps that were impersonating Sparrow Wallet and terminated the related developer accounts. The company also pointed users to its reporting tools and said it takes action against software that violates App Store rules.
Those rules bar apps from impersonating other services or using another developer’s brand without authorization. Apple also says every app undergoes review and describes the App Store as a safe and trusted place to download software. Separately, the company said it blocked more than $2.2 billion in potentially fraudulent transactions and rejected more than two million problematic app submissions during 2025.
Claims in the lawsuit
The plaintiffs argue that Apple’s safety-related marketing influenced their decision to trust the downloads, believing that applications listed in the App Store had been properly vetted. Their complaint includes claims under California’s Consumers Legal Remedies Act, Louisiana’s unfair-trade law and Massachusetts consumer-protection law. It also alleges fraudulent misrepresentation, negligent misrepresentation, concealment and failures to warn.
The lawsuit does not change the underlying technical risk identified in the complaint: entering a wallet recovery phrase into malicious software can hand control of the wallet to an attacker. The case now appears set to test how far Apple’s responsibility extends when impersonating crypto-related apps pass through its review system and users say they relied on the company’s representations about platform safety.
Source: crypto.news