Overview
- Three plaintiffs filed a federal complaint on July 24 alleging they lost about $1.8 million in Bitcoin after downloading a fraudulent iOS app that impersonated the desktop-only Sparrow Wallet.
- The complaint says the fake app asked users to enter recovery seed phrases, private strings that give full control of self-custodied wallets, and that thieves used those phrases to transfer the funds to attacker-controlled addresses.
- Plaintiffs argue Apple’s marketing of the App Store as a “safe and trusted” marketplace and its app-review process misled users and failed to stop repeated impersonating listings despite prior reports.
- Apple told reporters it removed the impersonating Sparrow listings and terminated the developer accounts tied to them, but the suit seeks money damages, injunctions and public warnings and the case is at an early stage awaiting Apple’s formal court response.
- The filing notes years of public warnings from Sparrow’s developer and places this incident in a pattern of copycat wallet scams on major app marketplaces, a dynamic that could push courts to test platform duty and force changes to how stores vet crypto apps.