Three investors lost $1.8M after downloading a fake Sparrow Bitcoin wallet from Apple's App Store. The lawsuit, filed July 24, claims Apple failed to warn users despite knowing about the scam, as crypto-related cyber losses hit $20B in 2025.
Apple was sued last week by three people who said they lost a combined $1.8 million after downloading a counterfeit Bitcoin wallet from the company's App Store. The complaint, filed July 24 in a California court, names James Ramirez, Christopher Ellis and Jalen Delgado as plaintiffs.
Ramirez lost $875,000. Ellis lost $840,000. Delgado lost about $120,000. The thefts happened between May and August last year, according to the filing. The app was a fake version of Sparrow Wallet, a desktop-only Bitcoin wallet that does not have an iOS release.
The plaintiffs said Apple failed to remove the impostor app or warn users not to enter seed phrases into it, even after receiving reports about the scam. The company “exploited the consumer trust” it had built by marketing the App Store as a safe environment, the complaint said.
Craig Raw, the developer of the real Sparrow Wallet, said he had been flagging fake iOS versions since 2024. Apple responded by flagging his own developer account for potential termination instead of removing the counterfeit apps, the filing added.
The case lands as crypto-related cyber losses accelerate. An FBI report released earlier this year showed total cybercrime losses hit $20 billion in 2025, with crypto-related theft accounting for $11.4 billion – more than half of the total. Payment infrastructure firm Triple-A lost nearly $10 million this month to an exploit.
Overall losses from crypto-specific attacks reached $1.3 billion in the first half of 2026, with operational failures, phishing and social engineering dominating the attack vectors, according to industry data cited in the complaint.
App store oversight is becoming a regulatory tool in its own right. South Korea banned 29 foreign exchange apps from the Google Play Store this month, using platform control to enforce compliance rules. The Apple lawsuit seeks damages and a court order requiring the company to strengthen its screening process for cryptocurrency applications.
The case highlights a structural gap in mobile app security: desktop-only wallets that scammers clone onto iOS stores where no legitimate version exists. For users who rely on app store trust as a safety signal, the fake Sparrow Wallet case suggests that signal can be exploited at scale.
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