Three Bitcoin investors have sued Apple over a counterfeit Sparrow Wallet app that stole $1.8 million, alleging negligence and fraud.
Three Investors Accuse Apple of Allowing Fraudulent App
In a significant legal move, three Bitcoin investors have filed a lawsuit against Apple, alleging that a fake Sparrow Wallet app led to a combined loss of $1.8 million. The case, presented in the Northern District of California on July 24, includes eight allegations, including fraud and negligent misrepresentation.
Details of the Claims
According to the lawsuit, all plaintiffs entered their seed phrases into the fraudulent app. Individual losses include James Ramirez, who reported a loss of 7.4 BTC, approximately $875,000; Christopher Ellis, who lost $840,000; and Jalen Delgado, who faced a loss of 1.05 BTC, worth around $120,000. The authentic Sparrow Wallet is exclusively available on Windows, macOS, and Linux, and has never been offered on iOS, casting the App Store listings into doubt.
Ramirez notified Apple of the app and his loss on July 25, 2025, but claims he received no response. Ellis downloaded the app nine days after Ramirez’s report, and the lawsuit states that at the time of filing, the fraudulent app was still listed on the App Store. It also contends that Apple had inadvertently promoted the scam applications in curated cryptocurrency collections, misleading consumers.
Developer's Warnings
Craig Raw, the developer of the legitimate Sparrow Wallet, has been cautioning users about counterfeit apps since January 2024. In a tweet, he expressed frustration that the fake app remained available despite multiple reports. Raw has attempted to inform iOS users that the Sparrow Wallet is exclusively for desktops, but Apple rejected his listing that aimed to clarify this point.
"Despite my reports and those of others, there is still a scam ‘Sparrow Wallet’ app on the @Apple App Store. Always visit the official website to find download links. App stores cannot be relied upon for protection," — Craig Raw.
Apple's Response
When approached for comment, Apple did not address the lawsuit directly and pointed to its recent report highlighting the rejection of over 371,000 malicious submissions from the App Store. The company claimed there are no impersonating Sparrow Wallet apps currently available.
One aspect of the lawsuit seeks to classify the App Store itself as a product, potentially holding Apple strictly liable for inadequate consumer protection warnings, as the plaintiffs argue that Apple’s disclaimers are not easily accessible to users.
