Apple sued after App Store fake Sparrow Wallet apps allegedly cost users $1.8 million in bitcoin

Apple is facing a lawsuit in California after three users alleged they lost a combined $1.8 million in bitcoin after downloading a fake Sparrow Wallet app from the App Store between May and August 2025. The complaint says the counterfeit app appeared despite the fact that the real Sparrow Wallet is desktop-only software for Windows, macOS and Linux, and that users were prompted to enter seed phrases that attackers then used to drain funds. The three plaintiffs say they lost $875,000, $840,000 and $120,000 in bitcoin, respectively. They allege Apple reinforced the app’s credibility by placing it in curated cryptocurrency collections and failed to stop an unauthorized Sparrow Wallet listing from appearing in the store. Craig Raw, the official developer of Sparrow Wallet, said he had spent years trying to flag copycat apps and was threatened with suspension when he tried to publish a text-only warning that no iOS version existed. Apple declined to comment on the litigation, but said the fraudulent app had been removed and associated developer accounts terminated. Company representatives also pointed to its 2025 fraud-prevention figures, including blocking more than $2.2 billion in fake app transactions and shutting down 193,000 malicious developer accounts. The case adds to broader scrutiny of major app marketplaces over counterfeit crypto software and follows a separate incident three months earlier in which a fake Ledger Live reportedly drained $9.5 million from Mac users.