Three cryptocurrency investors filed a federal lawsuit against Apple on July 24, alleging they lost a combined $1.8 million in Bitcoin through a fake Sparrow Wallet app listed on the App Store. The complaint was filed in the U.S. District Court for the Northern District of California and accuses Apple of failing to adequately review and monitor apps distributed through its platform. The lawsuit alleges Apple violated California's Consumers Legal Remedies Act and other consumer protection laws by failing to adequately screen apps, despite marketing the App Store as a safe and trusted environment for users.
Three Investors Allege $1.8 Million Bitcoin Loss via Fake App
James Ramirez, Christopher Ellis, and Jalen Delgado allegedly lost about $875,000, $840,000, and $120,000, respectively. The thefts occurred between May and August 2025. The fake app impersonated Sparrow Wallet, a Bitcoin wallet available on Windows, macOS, and Linux. Sparrow Wallet does not offer an iOS app.
Users were allegedly asked to enter their 12- or 24-word recovery phrases. A recovery phrase acts as the master key to a crypto wallet. Anyone who obtains it can control the assets inside. The lawsuit alleges the fake app sent those phrases to the scammers. The attackers then transferred the victims' Bitcoin to wallets they controlled.
The plaintiffs said they trusted the fake app because Apple markets the App Store as "a safe and trusted place to discover and download apps." The lawsuit states: "This fraud succeeded precisely because Apple exploited the consumer trust it had deliberately cultivated through more than a decade of marketing the App Store as a uniquely safe and trusted environment."
Apple recently overtook Nvidia to become the world's largest public company by market capitalization. Its valuation stood at about $4.989 trillion at the time of writing.
Apple Removes Fake Sparrow Wallet Apps
Sparrow Wallet developer Craig Raw has publicly warned about fake versions since at least January 2024, writing on X that "there is still a scam 'Sparrow Wallet' app on the @Apple App Store, despite myself and others having reported it weeks ago."
In June, Raw said Apple briefly flagged his developer account for termination after he submitted a placeholder app intended to warn users that Sparrow Wallet is desktop-only. Apple later reversed the decision.
Apple said on July 27 that it had removed apps impersonating Sparrow Wallet and terminated the associated developer accounts. The lawsuit seeks damages for the Bitcoin allegedly stolen. It also asks the court to require stronger App Store screening and fraud warnings.
DefiLlama Data Shows $1.07 Billion Crypto Hacks in 2026
The lawsuit comes amid another costly year for crypto users and protocols. DefiLlama data shows hacks drained about $1.07 billion from crypto projects between January and July 2026. April recorded the largest monthly loss at $644.85 million. July followed with $118.79 million, while January accounted for $101.57 million.
The figures cover protocol hacks and exploits. They do not measure all consumer scams, including fake wallet apps and social engineering attacks.
FAQ
What did the three investors allege in the lawsuit against Apple?
The three investors alleged they lost a combined $1.8 million in Bitcoin through a fake Sparrow Wallet app listed on the App Store. The complaint, filed on July 24 in the U.S. District Court for the Northern District of California, accuses Apple of failing to adequately review and monitor apps distributed through its platform. The lawsuit alleges Apple violated California's Consumers Legal Remedies Act and other consumer protection laws.
When did Apple remove the fake Sparrow Wallet apps?
Apple said on July 27 that it had removed apps impersonating Sparrow Wallet and terminated the associated developer accounts. Sparrow Wallet developer Craig Raw has publicly warned about fake versions since at least January 2024.
