Apple is facing a proposed class-action lawsuit in the United States after three iPhone users alleged that a fraudulent cryptocurrency wallet app available on the App Store led to the theft of nearly $1.8 million worth of Bitcoin.
The lawsuit, filed on July 24 in the U.S. District Court for the Northern District of California, alleges that a fake app posing as the Sparrow Bitcoin Wallet was allowed onto Apple's App Store despite the company's app review process. The three plaintiffs — James Ramirez, Christopher Ellis and Jalen Delgado, claim they lost approximately $875,000, $840,000 and $120,000, respectively.
According to the complaint, the users downloaded the app believing it to be genuine and entered the security credentials needed to access their cryptocurrency wallets. The lawsuit alleges scammers then used those details to transfer the victims' Bitcoin, with no way to recover the funds.
The complaint also alleges that Apple did not take adequate action after the fraudulent app was reported and claims similar fake Sparrow Wallet apps continued to appear on the App Store.
According to the lawsuit, Sparrow Wallet is available only on Windows, macOS and Linux and does not have an official iPhone app. The complaint alleges scammers exploited this by publishing fake versions on the App Store. It also cites previous warnings from Sparrow Wallet developer Craig Raw about counterfeit apps appearing on Apple's platform.
The plaintiffs are seeking damages and a court order requiring Apple to strengthen its App Store review process for cryptocurrency apps. Apple declined to comment on the lawsuit but said that apps impersonating legitimate software violate its App Store policies. It added that the fake apps had been removed and the associated developer accounts had been terminated.
The case comes amid growing scrutiny of fraudulent cryptocurrency apps on major app stores and is expected to test whether Apple's App Store review process provides adequate protection against such scams.