Three investors lost $1.8M in bitcoin after a fake Sparrow Wallet appeared on the App Store. The lawsuit says Apple promoted the fraudulent app in search results and curated collections.
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Three bitcoin investors have sued Apple, claiming they lost nearly $1.8 million after downloading a fake Sparrow Wallet from the App Store and entering their recovery phrases. The federal complaint, filed in the Northern District of California, argues Apple failed to review or monitor the fraudulent software while promoting the marketplace as a trusted source for downloads.
James Ramirez, Christopher Ellis, and Jalen Delgado each downloaded a counterfeit version of the legitimate Sparrow Wallet. The fake app looked identical to the real one, the lawsuit said. Once they entered their seed phrases, scammers drained their bitcoin to wallets they controlled.
Delgado installed the app around May 1, 2025, and lost about 1.05 bitcoin, then worth roughly $120,000. Ramirez downloaded the app in July 2025 and lost 7.4 bitcoin, worth about $875,000. Ellis installed the app days later and lost about $840,000, the complaint said. The combined losses come to roughly $1.8 million.
Court documents contend Apple ranked the fraudulent software in App Store search results and included it in curated cryptocurrency collections. This happened despite earlier reports identifying fake Sparrow Wallet listings, according to the filing.
Developer Craig Raw, who created the legitimate Sparrow Wallet as a desktop application, had warned publicly in 2024 that scammers were repeatedly publishing fake versions of the app in Apple's marketplace. Raw said the project has never released an iPhone version and urged users to download Sparrow Wallet only from the official website.
Claims in the complaint echo an earlier phony bitcoin iOS wallet scam, where an investor reportedly lost more than $1 million after installing a counterfeit wallet app. The case also resembles a fake Ledger app that targeted iPhone users, which blockchain investigator ZachXBT linked to roughly $9.5 million in stolen cryptocurrency from about 50 victims during a single week.
Apple said it removed the apps impersonating Sparrow Wallet after identifying policy violations. It also terminated the developer accounts responsible for distributing them, according to Bleepingcomputer. The company directs developers to report intellectual property infringement to its legal department and encourages consumers to submit suspected App Store fraud through Apple's Report a Problem service.
Apple reported blocking more than $2 billion in fraudulent App Store transactions during 2025. The company said it removed malicious apps, terminated fraudulent developer accounts, and expanded automated systems designed to identify suspicious activity before software reaches users.
The lawsuit lands after Apple revised its App Store rules for crypto apps, expanding how digital asset applications can operate on iOS while keeping the company's review process in place.
Federal authorities continue to warn that cryptocurrency investment fraud is one of the fastest-growing forms of financial crime. The FBI reported in April 2026 that Americans reported more than $11 billion in cryptocurrency-related fraud losses during 2025, with investment scams accounting for the largest share.
Plaintiffs are seeking reimbursement for the stolen bitcoin, compensatory and punitive damages, restitution, attorneys' fees, and a court order requiring Apple to strengthen its procedures for detecting fraudulent applications. They also want Apple to introduce clearer warnings about the risks of cryptocurrency wallet apps.
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