Three plaintiffs have filed a lawsuit against Apple, alleging a fraudulent App Store crypto wallet app caused losses of USD 1.8 million.
The complaint, filed with the US District Court for the Northern District of California, states that the plaintiffs downloaded an app called Sparrow Wallet from the App Store, despite the official Sparrow Bitcoin wallet not being available on iOS. According to the filing, the plaintiffs transferred bitcoin to the fraudulent app and subsequently lost the funds. The individuals are reported to have lost approximately USD 875.000, around USD 840.000, and roughly USD 120.000.
The lawsuit challenges Apple's long-standing position that its control over App Store distribution provides a level of security unmatched by competing app ecosystems. Apple has previously used this argument in discussions around regulatory proposals that would require it to permit third-party app stores and sideloading on its devices. The complaint states that Apple's marketing has positioned the company as offering a superior standard of security and trustworthiness, and argues that this has led consumers to rely on Apple's assurances when downloading apps.
The complaint also alleges that Apple was aware that fraudulent apps were present on the App Store, referencing public criticism from the developer of the official Sparrow Bitcoin wallet, who has said Apple allowed counterfeit versions of the app to remain available. The plaintiffs are seeking a jury trial, compensation for their losses and additional damages, along with a request that Apple provide clearer warnings and disclosures about risks associated with the App Store.
Apple's response and App Store security measures
Apple has declined to comment directly on the lawsuit. The company said that apps impersonating others violate its guidelines and that it removes such apps when identified, adding that no Sparrow Wallet copycat apps are currently listed on the App Store.
Apple has also pointed to data from its own review of App Store activity, which found that in 2025 it rejected more than 371.000 app submissions for copying other apps, spamming users or otherwise attempting to mislead them. The company has cited this and related figures, including a claim that its review processes prevented more than USD nine billion in fraudulent transactions, as evidence supporting its broader security record.
Implications for the app distribution debate
The case adds to ongoing scrutiny of how Apple polices its App Store at a time when regulators in various jurisdictions are examining app distribution rules, including requirements for allowing alternative app stores and sideloading. Should the lawsuit proceed, it could test the extent to which Apple's public statements about App Store security create legal obligations beyond its stated content-review guidelines, with potential implications for how the company and its competitors describe the safety of their platforms to users.
