Apple Faces Lawsuit Over Alleged Bitcoin Wallet Scam Scheme

Three iPhone users have filed a lawsuit against Apple in US District Court for Northern California, alleging they lost approximately $1.8 million after installing a fake Bitcoin wallet application through the App Store.

The complaint claims that the plaintiffs downloaded what they believed was a legitimate Sparrow Wallet app but was actually a fraudulent copy designed to capture seed phrases, recovery words used to access cryptocurrency wallets.

According to the lawsuit, the users entered their seed phrases into the fake app, allowing scammers to transfer their Bitcoin holdings. Apple has removed apps impersonating Sparrow Wallet and terminated related developer accounts, but the plaintiffs argue that the company did not do enough to screen and supervise apps distributed through its App Store.

The victims reported losses of around $875,000, $840,000, and $120,000 in 2025. Apple has pointed out its reporting mechanisms for developers and users to report applications violating App Store guidelines, but the lawsuit centers on whether these controls were sufficient given the scale of the losses.