Apple sued after fake Sparrow Wallet app allegedly stole $1.8 million

Three iPhone users have sued Apple after allegedly losing Bitcoin worth about $1.8 million through a fake Sparrow Wallet app on the App Store.

The complaint filed on July 24 argues that Apple’s promises of App Store safety led James Ramirez, Christopher Ellis, and Jalen Delgado to trust the fraudulent app. The plaintiffs say it captured their Bitcoin seed phrases and transferred their funds to wallets controlled by scammers.

The case was filed in the U.S. District Court for the Northern District of California. Its claims are allegations, and the court has not found Apple liable.

The plaintiffs say they lost $1.835 million

The alleged thefts happened over several months in 2025:

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Delgado says he lost about $120,000 after downloading a fake Sparrow app on May 1.
Ramirez says 7.4 Bitcoin, then worth about $875,000, was taken after he downloaded an app on July 25.
Ellis says he lost about $840,000 after finding the app on August 3.

All three say they entered their seed phrases when the app asked for them. Anyone with that recovery phrase can take control of the wallet and move its funds.

Ramirez says he reported the fake app and his loss to Apple on July 25. According to the complaint, Ellis still found it on the App Store nine days later and also reported what happened.

Sparrow Wallet does not have an iPhone app

The real Sparrow Wallet is desktop software. Its official download page lists versions for macOS, Windows, and Linux, but none for iOS or iPadOS.

Sparrow developer Craig Raw had publicly warned about impersonator apps as early as January 2024. The new lawsuit alleges that Apple failed to remove fake listings quickly enough or clearly warn users that App Store review did not confirm a crypto wallet’s identity.

That distinction matters with wallet apps. An App Store listing is not proof that an app belongs to the project it claims to represent. Users should check the developer’s official website before downloading anything and never enter a seed phrase into an unfamiliar app.

The lawsuit targets Apple’s safety claims

The plaintiffs accuse Apple of misleading customers by calling the App Store a safe and trusted place while allegedly failing to stop or respond to reported crypto scams.

They are seeking reimbursement for the stolen funds, compensatory and punitive damages, and court orders that would require stronger review, monitoring, and warnings for cryptocurrency apps.

Apple has faced a similar lawsuit over the Swiftcrypt scam app, which allegedly cost another user more than $80,000. The new case is separate, but both complaints focus on the gap between Apple’s safety marketing and fraudulent apps that reached users.

Apple says its review system combines human checks with automated tools. In its latest App Store fraud report, the company said it rejected more than 2 million problematic app submissions and stopped over $2.2 billion in potentially fraudulent transactions during 2025.

Those figures do not answer the plaintiffs’ specific claims. The case will turn on whether they can show that Apple’s marketing and its alleged handling of reported fake apps made the company legally responsible for their losses.

If you spot an app impersonating a known service, you can report the scam from the App Store or Apple’s Report a Problem page.