Three cryptocurrency investors have sued Apple after losing a combined $1.8 million in Bitcoin to a counterfeit Sparrow Wallet application that allegedly passed through the company’s App Store review despite Apple’s longstanding claims that the marketplace is carefully curated and secure. James Ramirez, Christopher Ellis, and Jalen Delgado filed a consolidated complaint on 24 July in the U.S. District Court for the Northern District of California, San Jose Division.
According to the complaint, the three downloaded what appeared to be the legitimate Sparrow Wallet, entered their wallet recovery phrases as instructed, and lost their Bitcoin after the app transferred the funds to wallets controlled by scammers. The plaintiffs claim combined losses of approximately $1.835 million and argue that Apple’s review process and public representations about user safety contributed to the fraud.
Investors Allege Fake Wallet Stole $1.8M in Bitcoin
According to the complaint, Delgado was the first of the three to download the counterfeit application, around 1 May 2025, and lost 1.05 BTC valued at roughly $120,000 after entering his wallet recovery phrase. Ramirez downloaded the same application on 25 July 2025 and entered his recovery phrase before discovering that 7.4 BTC, worth about $875,000, had been transferred from his wallet. He reported the fraudulent app to Apple the same day but received no response.
Ellis downloaded the application on or around 3 August 2025, more than a week after Ramirez reported it, and lost Bitcoin valued at about $840,000. The plaintiffs argue that Apple had actual notice of the fraud after Ramirez’s report yet failed to remove the app before Ellis downloaded it.
The complaint also cites earlier warnings, noting that Craig Raw, founder of the legitimate Sparrow Wallet, publicly flagged counterfeit versions on the App Store as early as 2024. The plaintiffs further allege that Apple ranked the fraudulent app in search results and featured it in cryptocurrency app collections, raising its visibility to users. Fraudulent wallet software has drained users elsewhere on the store, and Apple removed a counterfeit Ledger Live application earlier this year after an investigation tied it to $9.5 million in losses across more than 50 victims.
Lawsuit Challenges Apple’s App Store Review Process
The complaint argues that Apple markets the App Store as a trusted marketplace where every application undergoes thorough review, giving consumers confidence that listings had been vetted while any limits of that review appeared only within its terms and conditions. The lawsuit also references previous incidents of fraudulent cryptocurrency applications reaching the App Store, arguing they point to an ongoing gap in Apple’s review procedures despite the company’s assurances.
Apple has drawn regulatory attention over its crypto listings, with South Korea’s financial regulator requesting the removal of 14 exchange applications it classified as unregistered operators, and it previously suspended the MetaTrader apps over their role in pig butchering scams before reinstating them.
The plaintiffs bring eight claims under consumer protection laws in California, Louisiana and Massachusetts, alongside fraud and failure-to-warn allegations, and seek compensatory and punitive damages, injunctive relief forcing Apple to strengthen its review process and publish corrective advertising, and a jury trial. Apple noted it has taken swift action to remove any apps impersonating Sparrow Wallet on the App Store and to terminate developer accounts associated with those apps.