Apple faces $1.8M lawsuit over fake Bitcoin app

Fake Sparrow apps allegedly captured seed phrases

The complaint says Delgado downloaded a spoof application around May 1, 2025 and lost about $120,000. Ramirez allegedly downloaded another on July 25 and lost 7.4 BTC, valued near $875,000. Ellis allegedly lost about $840,000 after using the app around August 3. Each user says the software requested a wallet seed phrase before transferring Bitcoin to attacker-controlled addresses.

Sparrow’s official website describes the product as a desktop Bitcoin wallet. Its current download page lists versions for macOS, Windows and Linux, but none for iOS. Entering a recovery phrase into malicious software gives an attacker the credentials needed to control the associated wallet.

Apple says it removed impersonating apps

Apple told MacRumors that it acted quickly to remove applications impersonating Sparrow Wallet and terminated developer accounts connected to them. The company also pointed users to its reporting tools and said it takes action against applications that breach App Store rules.

Apple’s published review rules prohibit applications from impersonating another service or using another developer’s brand without permission. The company says every app is reviewed and describes the App Store as a safe and trusted marketplace. Apple separately reported blocking more than $2.2 billion in potentially fraudulent transactions and rejecting more than two million problematic submissions during 2025.

The plaintiffs argue that Apple’s safety marketing led them to believe applications offered through the App Store had been properly vetted. Their complaint brings claims under California’s Consumers Legal Remedies Act, Louisiana’s unfair-trade law and Massachusetts consumer-protection law. It also alleges fraudulent and negligent misrepresentation, concealment and failures to warn.

Those claims remain allegations. The plaintiffs seek a jury trial, reimbursement of lost digital assets, compensatory and enhanced damages where permitted, restitution and injunctive relief. Apple can contest both the factual account and whether its App Store representations created legal responsibility for losses caused by third-party scammers.

Previous crypto wallet scams add context

The dispute follows other cases in which fake wallet software reached major app marketplaces. Notably,a fraudulent Ledger Live application on Apple’s App Store allegedly stole at least $9.5 million from more than 50 users in April. On-chain investigator ZachXBT traced funds from that separate campaign through numerous exchange deposit addresses. The incident does not prove the claims in the Sparrow case, but it shows the recurring method.

However, fake Phantom, Rabby and UniSat applications have also appeared in app-store searches or listings. The common tactic is to imitate a recognised wallet and request a recovery phrase that the genuine provider would not need during routine use.

The next formal step is service of the complaint and Apple’s response, which could take the form of an answer or a motion seeking dismissal. The public docket did not show a hearing date or merits ruling when checked. Any award, product change or finding that Apple is liable would require a court decision or settlement.