Apple sued after fake Sparrow Wallet app on App Store drains $1.8M in Bitcoin
Three users say a counterfeit crypto wallet, promoted in App Store collections, tricked them into handing over the secret recovery phrases that guard their coins.
Key points
- Three plaintiffs filed suit against Apple in California on July 24, 2025, over roughly $1.8 million in stolen Bitcoin.
- The fake iOS app impersonated Sparrow Wallet, a desktop-only Bitcoin wallet that has no official iPhone version.
- Losses per victim: about $120,000 (Delgado, May 1), $875,000 (Ramirez, July 25) and $840,000 (Ellis, around August 3).
- Sparrow's developer Craig Raw publicly warned about impersonator apps as early as January 6, 2024.
- Plaintiffs want reimbursement, damages, and a court order forcing Apple to improve fake-app detection.
Three people are suing Apple after a counterfeit cryptocurrency wallet app, downloaded from the official App Store, allegedly drained about $1.8 million in Bitcoin from their accounts.
The lawsuit, first reported by BleepingComputer and filed on July 24 in California, says the fake app pretended to be Sparrow Wallet, a well-known program used to store and send Bitcoin. The real Sparrow only runs on desktop computers. There is no official iPhone version, a detail that sits at the heart of the case.
How did people lose their Bitcoin?
The victims installed what looked like Sparrow Wallet from Apple's App Store, then entered their seed phrase, a string of secret words that acts as the master key to a crypto wallet. Whoever knows the seed phrase controls the coins. The app sent those words straight to the scammers, who emptied the wallets within minutes.
Jalen Delgado downloaded the fake app around May 1, 2025, and lost roughly 1.05 Bitcoin, about $120,000. James Ramirez installed it on July 25 and lost 7.4 Bitcoin, about $875,000. Christopher Ellis followed on August 3 and lost around $840,000.
Ramirez reported the theft to Apple the same day, according to the complaint, but says Apple never got back to him.
What is Apple accused of doing wrong?
The plaintiffs argue Apple sold the App Store as a safe, curated place to get software, then failed to police it. They also claim Apple's own editorial team ranked the fake Sparrow app and included it in cryptocurrency app collections, effectively recommending the scam alongside real products.
The complaint says Apple had been warned. Craig Raw, the developer of the genuine Sparrow Wallet, posted publicly on January 6, 2024 that a scam version was still live on the App Store weeks after he and others reported it. Raw later submitted a placeholder app that simply told users any Sparrow app on iOS was fake. Apple initially flagged his developer account for termination over the submission, then reversed course.
Apple told BleepingComputer it moved quickly to remove impersonator apps and shut down the developer accounts behind them. The company points users to its Report a Problem service for suspected fraud.
What are the victims asking for?
The three plaintiffs want their stolen crypto refunded, plus compensatory and punitive damages, restitution and legal fees. They are also asking the court to force Apple to publish and improve how it detects fake apps, and to display warnings about the risks of cryptocurrency apps.
| Victim | Date installed | Bitcoin lost | Approx. value |
|---|---|---|---|
| Jalen Delgado | May 1, 2025 | 1.05 BTC | $120,000 |
| James Ramirez | July 25, 2025 | 7.4 BTC | $875,000 |
| Christopher Ellis | August 3, 2025 | ~ | $840,000 |
What should crypto users take away from this?
If you use a self-custody wallet, only download it from the developer's official website, and check the URL carefully. A real wallet app will never ask you to type your seed phrase into a form to "restore" or "verify" it on first launch. Being listed in an app store, even a curated one, is not proof a wallet is legitimate. When in doubt, look at the developer's own site for a list of supported platforms. Sparrow, for instance, publishes plainly that it is desktop only.
