Three people are suing Apple after allegedly losing a combined $1.8 million to a fake cryptocurrency wallet app that was available in the App Store, intensifying scrutiny of the company’s longstanding claims that its tightly controlled marketplace is safer than rival app stores.
According to TechCrunch, the lawsuit alleges the three men downloaded a fraudulent version of the Sparrow Wallet cryptocurrency app between May and August 2025. Although Sparrow Wallet is a legitimate product, its developer had not released an iPhone version at the time. Craig Raw, the real developer behind Sparrow Wallet, says he warned Apple as early as January 2024 that fake versions were circulating in the App Store.
Users who downloaded the fraudulent app were prompted to enter their cryptocurrency wallet recovery phrases. That information allegedly allowed the criminals to access their digital wallets and steal their funds.
App Store Under Scrutiny
The case challenges one of Apple’s core selling points: that its strict control over the App Store makes it more secure than competing platforms. Apple has long maintained that it reviews every app before it is published.
The complaint also alleges that Apple featured the fake Sparrow Wallet app in curated cryptocurrency collections alongside legitimate products and continued allowing fake Sparrow Wallet apps to remain available even after users reported them.
“What makes this case especially concerning is that the fake app was available through Apple’s App Store, where many consumers assume the apps have already been vetted by Apple,” said Jennifer Pitt, Senior Analyst of Fraud Management at Javelin Strategy & Research. “Fake apps continue to get through app store reviews, and when consumers can’t rely on the company operating the store to keep out an app impersonating a legitimate business, it raises a serious question about who they can trust.”
A Broader Problem
Fake and fraudulent apps have also plagued Google’s Play Store. Earlier this year, researchers identified 28 Android apps that falsely claimed to provide access to call histories and SMS records for any phone number. The apps were downloaded an estimated 7.3 million times, with users receiving fabricated or worthless data in return.
“Consumers should always confirm through the company’s official website that the app actually exists,” said Pitt. “And always check that the listed developer is correct before downloading it.”
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