Apple is confronted with a lawsuit after a fraudulent Bitcoin wallet app impersonating Sparrow Wallet stayed available on its App Store despite user reports and significant financial losses. Three plaintiffs claim they collectively lost nearly $1.84 million after entering their Bitcoin seed phrases into the counterfeit app, which enabled scammers to steal their funds.
One individual reportedly lost $875,000, while another suffered an $840,000 loss. The legal complaint highlights that Apple delayed removing the fake app even after initial warnings, allowing scammers to continue accessing users’ wallets. This situation raises concerns about Apple’s oversight and how the app remained featured, including placement in Apple-curated cryptocurrency collections alongside legitimate apps.
The lawsuit accuses Apple of violating consumer protection laws through negligent and fraudulent misrepresentation, arguing that Apple’s App Store presents apps as thoroughly vetted and secure. The plaintiffs seek reimbursement of stolen assets, along with compensatory and punitive damages. Apple has responded by removing the counterfeit Sparrow Wallet apps and terminating the developer accounts responsible for the scams.