Summary
- Three Bitcoin investors have filed a lawsuit against Apple in a California federal court, alleging that a fraudulent Sparrow Wallet app siphoned off a total of $1.8 million.
- One of the plaintiffs alerted Apple about the app, while another lost $840,000 after downloading it nine days later, according to the lawsuit.
- Craig Raw, the creator of Sparrow Wallet, has been warning about counterfeit iOS applications since January 2024.
A group of three Bitcoin holders has taken legal action against Apple, claiming that a counterfeit version of the Sparrow Wallet app resulted in a loss of $1.8 million. The lawsuit, submitted on July 24 in the Northern District of California, includes eight charges such as fraud, negligent misrepresentation, and strict liability for products.
According to the lawsuit, each plaintiff entered their seed phrase into the app. James Ramirez reported a loss of 7.4 BTC, valued at approximately $875,000; Christopher Ellis lost $840,000; and Jalen Delgado lost 1.05 BTC, worth around $120,000. Notably, the legitimate Sparrow Wallet is only available on Windows, macOS, and Linux, and has never had an iOS version, making any App Store listing under that name a fraudulent impersonation.
Ramirez reported this app and his financial loss to Apple on July 25, 2025, the same day he was defrauded. Ellis downloaded the app from the App Store nine days later. The lawsuit claims that Ramirez has not received any response from Apple regarding his report, and fraudulent versions of the Sparrow app remained available on the App Store at the time the lawsuit was filed.
The lawsuit further alleges that, based on available information, Apple had ranked the fraudulent app and included it in curated cryptocurrency collections, effectively endorsing a scam application alongside legitimate options for consumers.
Warnings from the Developer
Craig Raw, the developer behind Sparrow Wallet and holder of the U.S. trademarks for the brand, has been alerting users about copycat malware in Apple's App Store since January 2024. He tweeted about a scam app still being available weeks after his report.
Despite my reports and those of others, there is still a scam ‘Sparrow Wallet’ app on the @Apple App Store.
Worse, you must install it to report it.
Always visit the official website of the wallet to find download links. App stores cannot be relied upon for protection.
— Craig Raw 🐦 (@craigraw) January 6, 2024
He also mentioned that he had submitted an App Store listing intended solely to inform iOS users that Sparrow is a desktop-only application. However, Apple rejected this listing as "placeholder content" and subsequently flagged his developer account for termination due to "dishonest activity," a decision that was later overturned on appeal.
Apple declined to comment on the lawsuit when approached by TechCrunch, instead referencing their recent ecosystem analysis, which reported rejecting over 371,000 malicious App Store submissions. The company also stated that there are currently no impersonating Sparrow Wallet apps on the App Store.
One of the counts in the lawsuit requests that the court consider the App Store as a product in the stream of commerce, which would hold Apple strictly liable for failing to provide adequate warnings. The plaintiffs argue that Apple’s disclaimers are buried deep within click-through terms.