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Apple Sued Over Fake Bitcoin Wallet in the App Store

The plaintiffs say Apple left up a fake Sparrow Wallet app despite earlier reports and millions in losses. The case is putting the App Store review process and crypto apps under pressure again.

By Mike Hesp
• 2 min read
Apple Sued Over Fake Bitcoin Wallet in the App Store

Key Takeaways

  • Apple is being sued because a fraudulent Bitcoin wallet app stayed in the App Store after reports of losses.
  • Three plaintiffs say they lost about $1.84 million combined to a fake app posing as Sparrow Wallet.
  • The plaintiffs want reimbursement, damages, and a clearer warning that an App Store listing does not prove authenticity.

Apple is facing a federal lawsuit that says the company kept a fraudulent Bitcoin wallet app in the App Store even after one user said he lost $875,000 (€768,300). The plaintiffs say that failure was followed by another loss of about $840,000 (€737,600), raising fresh concerns for crypto users who depend on app stores that are supposed to screen for fraud.

Fake App Posed as Sparrow Wallet

The case was filed on July 24 and flagged by MacRumors. Three people say they lost about $1.84 million (€1.6 million) in total after downloading an app that claimed to be Sparrow Wallet and entering their Bitcoin seed phrases. Anyone with a seed phrase can take control of the matching wallet and move the funds.

The complaint says Apple’s branding made it seem like App Store apps had already been reviewed and were safe to use. The plaintiffs are bringing eight claims, including consumer protection violations, fraudulent and negligent misrepresentation, and failure to warn. James Ramirez says he downloaded the app on July 25, 2025, and that 7.4 BTC was sent to a scammer. Christopher Ellis allegedly lost about $840,000 (€737,600) on August 3. Jalen Delgado says he installed it around May 1, 2025, and lost 1.05 BTC, worth about $120,000 (€105,400) at the time.

Apple Faces Pressure to Explain Its Review Process

The plaintiffs also claim Apple ignored reports from Ramirez and Ellis. They say the fake app was even ranked and featured in curated crypto collections next to legitimate products. The official Sparrow Wallet, according to the complaint, is only offered as a desktop app for Windows, macOS, and Linux, and has no iOS version.

The lawsuit highlights a familiar problem: fake crypto wallet apps keep slipping into app stores, while many users still assume a listing in a major marketplace means the app is legitimate. Here, the plaintiffs are seeking reimbursement for the stolen assets, damages, and a clearer explanation of where Apple’s review process falls short. They also want Apple to spell out that an App Store listing does not prove a crypto app is real.

Why This Matters for Crypto Users

For European crypto users, the case is another reminder of how much platform trust matters when it comes to wallet security. As app stores become a bigger on-ramp into crypto, the way major tech companies spot and remove fraud could have wider effects across the industry. Apple says it has removed apps impersonating Sparrow Wallet and disabled related developer accounts, and says it rejected more than 371,000 copycat, spam, or misleading submissions last year.

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