Apple faces lawsuit over fake Bitcoin wallet app that cost users $1.8 million
Regulation & Gov ·
Three Bitcoin holders allege in a California federal complaint that Apple's App Store hosted and promoted a counterfeit version of Sparrow Wallet that emptied their crypto holdings.
The case, filed July 24 in the Northern District of California, spans eight legal claims ranging from fraud to strict products liability, according to Decrypt. Plaintiffs James Ramirez, Christopher Ellis and Jalen Delgado together lost roughly $1.8 million after each typed a seed phrase into the fraudulent app. Ramirez's loss came to 7.4 BTC, valued at $875,000; Ellis lost $840,000; and Delgado lost 1.05 BTC, valued at $120,000. Sparrow Wallet's real software only runs on Windows, macOS and Linux, meaning any iOS listing carrying that name is necessarily an impostor product.
Timing details in the filing raise questions about how quickly Apple acted on reports of the scam. Ramirez notified Apple of the fake app and his loss on the same day it happened, July 25, 2025. Ellis, however, downloaded a Sparrow-branded app from the store nine days after that report was filed, and the suit says Apple never followed up with Ramirez. Fraudulent Sparrow listings remained available when the complaint was submitted, plaintiffs say.
Beyond simply hosting the counterfeit, the lawsuit alleges Apple actively surfaced it — placing the fake app in curated cryptocurrency app collections next to authentic wallets, which the filing describes as an implicit endorsement to consumers. One legal theory in the case, count seven, seeks to have the App Store treated as a commercial product subject to strict liability for failing to warn users, arguing that Apple's disclaimers are buried inside lengthy terms that few read.
The dispute echoes warnings the real Sparrow Wallet developer, Craig Raw, has issued since January 2024, when he first flagged look-alike malware circulating on Apple's platform. Raw has said he later tried submitting his own App Store listing solely to inform iPhone users that Sparrow has no mobile version, only for Apple to reject it as placeholder content and threaten to terminate his developer account for dishonest activity — a decision it later reversed on appeal.
Apple has not commented directly on the litigation, instead pointing to its own ecosystem review claiming more than 371,000 malicious submissions were rejected and stating no Sparrow copycats currently exist on the store. It remains unresolved how the counterfeit passed initial review, why the July 25 report from Ramirez went unanswered, and whether the strict-liability theory targeting the App Store itself will survive early motions.