Apple sued over fake Sparrow Wallet apps tied to $1.8 million Bitcoin losses

Apple is facing a California federal lawsuit from three Bitcoin holders who say counterfeit Sparrow Wallet apps on the App Store drained a combined $1.8 million. The complaint, filed July 24 in the Northern District of California, includes eight counts such as fraud, negligent misrepresentation and strict products liability, and argues Apple failed to adequately review, remove and warn users about apps impersonating Sparrow, a desktop-only wallet. The filing says Jalen Delgado lost 1.05 BTC, valued at $120,000, James Ramirez lost 7.4 BTC, valued at $875,000, and Christopher Ellis lost $840,000 after each entered a seed phrase into a fake app. Ramirez says he reported the app and his loss to Apple on July 25, 2025, but Ellis downloaded a Sparrow app from the store nine days later. The complaint also alleges Apple ranked the fake app and featured it in curated cryptocurrency collections, effectively lending credibility to the impersonator. Sparrow Wallet developer Craig Raw has publicly warned since January 2024 that copycat iOS apps were appearing on Apple’s marketplace even though Sparrow has never had an iOS version. Apple declined to comment on the lawsuit, but pointed to its latest ecosystem analysis saying it rejected more than 371,000 malicious App Store submissions, and said there are currently no Sparrow Wallet copycats on the store. The case adds to a broader debate over whether app-store operators can be held liable when fraudulent crypto wallet software distributed through their platforms leads to irreversible losses.