Fake Crypto Wallet in Apple's App Store Allegedly Costs Three Users $1.8 Million
Three bitcoin investors have filed a federal lawsuit against Apple, alleging they lost nearly $1.8 million after downloading a fake Sparrow Wallet app from the App Store and entering their recovery phrases. The complaint claims Apple failed to properly review and monitor the fraudulent software, which allowed scammers to steal the victims’ cryptocurrency holdings.
According to the filing, plaintiffs James Ramirez, Christopher Ellis, and Jalen Delgado downloaded the counterfeit app between May and July 2025. Delgado lost approximately 1.05 bitcoin worth $120,000, Ramirez lost 7.4 bitcoin valued at $875,000, and Ellis discovered about $840,000 in missing cryptocurrency. The combined losses total roughly $1.8 million.
The lawsuit contends that Apple promoted the fraudulent app in App Store search results and included it in curated cryptocurrency collections, despite earlier warnings about 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 fake versions on Apple’s marketplace. Notably, Sparrow Wallet has never released an iOS version.
Apple responded by stating it removed apps impersonating Sparrow Wallet after identifying policy violations and terminated the associated developer accounts. The company also noted that it blocked over $2 billion in fraudulent App Store transactions during 2025, removed malicious apps, and expanded automated detection systems.
This case adds to growing concerns about crypto scams on mobile platforms. The FBI reported that Americans lost over $11 billion to cryptocurrency-related fraud in 2025, with investment scams being the largest category. Plaintiffs are seeking damages, restitution, and a court order requiring Apple to strengthen its fraud detection and provide clearer warnings about crypto wallet risks.