Apple is facing a federal lawsuit over an app that impersonated the Sparrow Wallet and stayed in the App Store for another week after the first theft victim reported it. Three plaintiffs say they lost a combined $1.84 million in Bitcoin after entering their seed phrases into the fake app.
What Happened With the Fake Wallet in the App Store
The complaint was filed July 24 in the US District Court for the Northern District of California. According to the plaintiffs, an app named Sparrow Wallet appeared in the App Store even though the real Sparrow Wallet has never shipped an iOS version and runs only on Windows, macOS and Linux, meaning any listing under that name in the App Store is an impersonation.
James Ramirez downloaded the app on July 25, 2025, and reported the theft of 7.4 Bitcoin, worth about $875,000 at the time, to Apple the same day. Christopher Ellis installed the same fake app nine days later, on August 3, and lost roughly $840,000. According to the plaintiffs, Apple never responded to any of their reports, and fraudulent apps under the same name were still listed when the complaint was filed.
Who Filed the Suit and How Much They Lost
A third plaintiff, Jalen Delgado, downloaded the fake app back in May 2025 and lost 1.05 BTC, worth roughly $120,000 at the time. All three entered their seed phrase directly into the app. A seed phrase grants full access to a wallet, and anyone who obtains it can withdraw all funds without further confirmation.
- James Ramirez lost 7.4 BTC, about $875,000, and reported it to Apple the same day.
- Christopher Ellis lost about $840,000 after installing the app following Ramirez's complaint.
- Jalen Delgado lost 1.05 BTC, about $120,000, the earliest of the three incidents.
How Apple Has Faced Similar Suits Before
This is not Apple's first legal fight over counterfeit crypto wallets. In 2021, cryptocurrency holders filed a similar suit that was dismissed after a federal judge ruled Apple acts as a publisher of App Store listings, not their creator, and therefore cannot be held liable for their content.
Sparrow Wallet developer Craig Raw has been flagging copycat apps since January 2024. According to the complaint, Apple was notified about the fake app weeks in advance but left it available for download for several more weeks after the reports.
What the Plaintiffs Are Asking For
The suit brings eight counts, including violations of consumer-protection laws, fraudulent and negligent misrepresentation, strict products liability, and failure to warn users about the risks. The plaintiffs argue Apple's marketing led them to believe every app in its tightly controlled store had been vetted and was safe.
Beyond reimbursement for the stolen funds and compensatory and punitive damages, the suit asks the court to order Apple to disclose the limits of its review process, tighten its controls, and warn users that an App Store listing does not confirm an app is genuine. Apple has since removed the fake app and terminated the associated developer accounts, though that does not resolve the lawsuit itself. For anyone holding large crypto balances, the case is a reminder to keep private keys in a hardware wallet such as Ledger rather than typing a seed phrase into a mobile app.
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