A lawsuit claims Apple knowingly kept a fake bitcoin app available on its App Store for over a week, even after being notified that one customer had lost $875,000 and another lost around $840,000 due to the app.
A lawsuit filed on July 24th reveals that three individuals lost a combined total of $1.84 million after downloading a fake app disguised as Sparrow Wallet. The victims entered their bitcoin seed phrases into the fraudulent app, which gave the thieves control over their wallets and allowed them to steal the funds. Seed phrases are essentially the keys that control and transfer bitcoin from a wallet.
A new lawsuit filed in California claims Apple misled customers into thinking apps available in its App Store had been checked for safety and reliability. The lawsuit makes eight separate claims, alleging violations of consumer protection laws, as well as fraudulent and negligent misrepresentation, and a failure to adequately warn users about potential risks.
Apple has dealt with similar legal issues in the past. Back in 2021, people who owned cryptocurrency sued Apple over a scam involving a fake wallet app, but the case was ultimately dropped. The judge ruled that Apple wasn’t responsible because it simply hosted the app, rather than creating it.
James Ramirez is suing after claiming he downloaded an app on July 25, 2025, and then had 7.4 Bitcoin stolen by a scammer. He reported both the app and the theft to Apple on the same day. Another user, Christopher Ellis, claims he lost around $840,000 after installing the app on August 3rd.
Jalen Delgado lost approximately $120,000 worth of Bitcoin (1.05 BTC) after downloading an app around May 1, 2025. He believed the app was safe because Apple had stated its App Store was secure and apps were reviewed by experts, according to court documents.
Ramirez and Ellis said Apple never responded to their reports.
Sparrow Wallet is a desktop app for Windows, macOS, and Linux computers. It’s currently not available on iPhones or iPads.
According to the lawsuit, Apple not only allowed a fake app to be listed but also promoted it by featuring it alongside real cryptocurrency apps. The developer of a separate app, Sparrow, had warned Apple in January 2024 that an impersonator app was still available even after being reported weeks prior.
In this case, we’re seeking to recover the assets that were allegedly stolen, as well as both compensatory and punitive damages – and potentially even more, depending on the circumstances. Beyond financial recovery, we also want Apple to be more transparent about how they review apps. Specifically, we’re asking them to reveal the weaknesses in their current process, improve their security measures, and clearly inform users that simply being listed in the App Store doesn’t guarantee a cryptocurrency app is legitimate.
Apple’s response
Apple confirmed to MacRumors that it has removed fake “Sparrow Wallet” apps from the App Store and banned the developers who created them.
Apple provides a way for developers to report potential copyright or intellectual property violations on its services. They can submit a dispute form to Apple’s legal team. Customers can also report scams or fraudulent activity they find in the App Store.
The company recently reported taking action against fraud on its platform. It had already closed nearly 200,000 developer accounts due to fraudulent activity. Last year alone, they blocked over 371,000 fake or misleading app submissions and prevented more than $2.2 billion in potentially dishonest transactions.
CoinDesk contacted Apple for comment, and had not received a response by publication time.
2026-07-28 15:10