Apple is facing a crypto wallet lawsuit from three people who claim a fraudulent app on the App Store stole approximately $1.8 million in Bitcoin.
The complaint, filed in California on 24 July, alleges that Apple failed to properly review and monitor software distributed through its marketplace. The plaintiffs argue that Apple promoted the App Store as a safe source of applications while allowing a fake crypto wallet to reach users.
The app allegedly impersonated Sparrow Wallet, a legitimate Bitcoin wallet available only for Windows, macOS and Linux. Sparrow Wallet does not offer an iPhone or iPad app.
Fake app allegedly stole users’ seed phrases
The plaintiffs, James Ramirez, Christopher Ellis and Jalen Delgado, say the fraudulent app asked them to enter their wallet seed phrases.
A seed phrase is a secret recovery credential that gives someone access to a cryptocurrency wallet. Once the users submitted those phrases, the complaint alleges that scammers transferred their Bitcoin to wallets under their control.
Delgado allegedly downloaded the app around 1 May 2025. He claims that scammers transferred 1.05033242 Bitcoin from his wallet shortly after he entered his seed phrase. At the time, the Bitcoin was reportedly worth around $120,000.
Ramirez allegedly installed the app on 25 July 2025 and lost 7.4 Bitcoin, valued at roughly $875,000. He says he reported both the app and theft to Apple that day.
Ellis allegedly downloaded the same app around 3 August 2025. He claims that approximately $840,000 in cryptocurrency disappeared from his wallet after he provided his seed phrase.
Lawsuit says Apple had earlier warnings
The Apple crypto wallet lawsuit alleges that the company had received warnings about fake Sparrow Wallet apps well before the plaintiffs’ losses.
Craig Raw, the developer of the legitimate Sparrow Wallet, warned in January 2024 that a fraudulent app using the name remained available in the App Store despite reports from him and other users.
Raw later tried to publish an unpublished placeholder app designed to warn people that mobile apps using the Sparrow Wallet name were fake. According to the complaint, Apple initially flagged his developer account for termination over alleged dishonest activity before reversing that decision.
The plaintiffs also claim Apple ranked the fake app and included it in curated cryptocurrency app collections. They argue that this gave the fraudulent software an appearance of legitimacy.
Apple says it removed the impersonating apps
Apple said it acted quickly to remove apps impersonating Sparrow Wallet and terminated the developer accounts connected to them.
The company added that developers can file intellectual property disputes through its legal department. Customers can also report suspected App Store scams through Apple’s Report a Problem service.
Apple said it takes action when apps breach its guidelines. However, it did not comment on the specific allegations in the case.
Plaintiffs seek damages and stronger protections
The plaintiffs want reimbursement for the cryptocurrency they say was stolen, along with compensatory and punitive damages, restitution and legal fees.
They are also asking the court to require Apple to improve and publicly explain how it detects and removes fraudulent apps. In addition, they want Apple to introduce clearer warnings about the risks linked to cryptocurrency applications.
The Apple crypto wallet lawsuit reinforces a basic security rule for digital asset holders: never enter a recovery phrase into an app unless its authenticity has been independently verified. In this case, the real Sparrow Wallet is desktop-only, so any app claiming to be its iOS version should be treated as suspicious.
0 responses to “Apple Crypto Wallet Lawsuit Seeks $1.8M Over Fake App”