Three bitcoin investors say they lost nearly $1.8 million after downloading a fake Sparrow Wallet from Apple’s App Store and entering their recovery phrases. The lawsuit now challenges Apple’s app review practices as crypto scams continue targeting mobile users.
Key Takeaways
Three plaintiffs claim a fake Sparrow Wallet app stole nearly $1.8 million in bitcoin.The lawsuit contends Apple promoted and failed to remove the counterfeit application despite earlier warnings.Plaintiffs want damages, stronger App Store safeguards, and clearer warnings for cryptocurrency applications.Three bitcoin investors have sued Apple, claiming they lost nearly $1.8 million after downloading a fake Sparrow Wallet app from the App Store and entering the recovery phrases that granted scammers access to their cryptocurrency holdings.
James Ramirez, Christopher Ellis, and Jalen Delgado contend the fraudulent wallet impersonated the legitimate Sparrow Wallet, prompting each victim to enter a seed phrase before their bitcoin was transferred to wallets controlled by attackers.
According to the filing, Delgado installed the counterfeit app around May 1, 2025, and lost about 1.05 bitcoin valued at roughly $120,000, while Ramirez allegedly forfeited 7.4 bitcoin worth approximately $875,000 after downloading the app in July 2025.
Ellis reportedly installed the counterfeit wallet days later and discovered about $840,000 in cryptocurrency had disappeared, bringing the plaintiffs’ combined alleged losses to approximately $1.8 million.
Earlier Warnings Highlighted Fake Sparrow Wallet AppsCourt documents further contend Apple ranked the fraudulent software in App Store search results and included it in curated cryptocurrency collections despite earlier reports identifying fake Sparrow Wallet listings.
Developer Craig Raw, creator of the legitimate Sparrow Wallet desktop software, had publicly warned in 2024 that scammers were repeatedly publishing fraudulent versions in Apple’s marketplace. Raw also urged users to download Sparrow Wallet only through its official website, noting the project has never released an iPhone version.
Apple Responds as Crypto App Security Faces ScrutinyThe company also indicated developers can report intellectual property infringement directly to its legal department, while consumers may submit suspected App Store fraud through Apple’s Report a Problem service for investigation.
Crypto Wallet Scams Continue Targeting Mobile UsersFederal authorities have continued warning that cryptocurrency investment fraud remains one of the fastest-growing forms of financial crime as criminals increasingly rely on fake applications, phishing campaigns, and social engineering to steal digital assets.
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 while introducing clearer warnings about the risks associated with cryptocurrency wallet apps.
