Three iPhone owners have sued Apple in California after collectively losing about $1.8 million in Bitcoin to a fake cryptocurrency-wallet app that Apple approved into the App Store — and, according to the lawsuit, actively promoted in curated “crypto wallet” collections for months. The fraudulent app impersonated Sparrow Wallet, a well-known desktop Bitcoin wallet whose real developers do not offer an iOS version at all — meaning any Sparrow Wallet app on the App Store is, by definition, a fake. Ramirez, Ellis and Delgado each downloaded the app between May and August 2025, entered their wallet recovery phrases as instructed, and watched their savings drain within minutes. The lawsuit, filed July 24, 2026, alleges Apple ignored repeated public warnings from the real Sparrow developer going back to January 2024.
This is a classic recovery-phrase phishing trap dressed up as a legitimate storefront listing: the fake app asks you to “import your wallet” by typing in the 12- or 24-word recovery phrase that is the master key to your funds. Anyone who has that phrase can drain the wallet from anywhere on Earth, instantly and irreversibly. The plaintiffs are asking Apple to reimburse them, improve its App Store review process for crypto apps, and post prominent warnings — but the immediate practical takeaway is that App Store approval is not proof that a crypto app is safe or genuine.
How to check if you’re affected
Affected devices are any iPhone or iPad on which you have ever downloaded a cryptocurrency wallet app. Open the App Store, search for the wallet you use, and confirm the listed developer name matches the one published on the wallet’s official website — not just the app’s logo or name. If in doubt, delete the app and download it fresh only via the “Download” link from the wallet vendor’s own site (typed into Safari by hand, not clicked from a search result or ad). If you ever typed a 12- or 24-word recovery phrase into any wallet app whose provenance you cannot confirm today, assume your funds are compromised: move any remaining balance to a brand-new wallet with a brand-new recovery phrase you generate yourself, and treat the old phrase as burned forever. Sparrow Wallet users specifically: the real Sparrow project has no iOS app, so any “Sparrow Wallet” you see in the App Store is fake — delete it.