A U.S. federal lawsuit alleges that Apple allowed a counterfeit Bitcoin wallet to be used even after receiving reports of stolen devices from users.Sparrow WalletThe app remained on the App Store, and subsequently, more users were hacked as a result. The three plaintiffs claim they lost a total of approximately $1.84 million after entering seed phrases into the app.
Two large thefts occurred after reports were filed.
The plaintiff filed a lawsuit on July 24 in the U.S. District Court for the Northern District of California. The complaint alleges that the fake app, masquerading as Sparrow Wallet, tricked users into entering their wallet recovery information. Once the seed phrase is leaked, the assets in the wallet can be controlled and transferred by others.
The lawsuit states that one of the plaintiffs, James Ramirez, downloaded the app on July 25, 2025, and subsequently lost 7.4 bitcoins, worth approximately $875,000 at the time. He claims he reported the app issue and the theft to Apple that same day.
The lawsuit alleges that the app remained available for download for over a week afterward. Another plaintiff, Christopher Ellis, installed the app on August 3, 2025, and subsequently lost approximately $840,000. A third plaintiff, Jalen Delgado, claims that she lost 1.05 bitcoins, worth approximately $120,000 at the time, after downloading the app around May 2025.
The plaintiff claims that Apple's security advertising was misleading.
The plaintiffs argue that Apple's long-standing description of the App Store as a rigorously vetted and relatively safe app marketplace led them to believe that listed apps had been verified. The lawsuit therefore raises several claims, including consumer protection, false representation, negligent misrepresentation, and failure to adequately warn of risks.
The lawsuit also alleges that Apple not only allowed the app to continue existing but also ranked it highly and placed it in the Encrypted Apps Featured List, displaying it alongside legitimate products. The lawsuit further states that Sparrow developer Craig Raw warned as early as January 2024 that counterfeit apps remained on the App Store weeks after being reported.
Sparrow does not have an iPhone version.
Public information shows that the official Sparrow Wallet is only available as a desktop version, supporting Windows, macOS, and Linux, and there is no iOS app. This means that any version appearing on the Apple App Store under the name Sparrow Wallet is not an official product.
Apple has told foreign media that it has removed all apps impersonating Sparrow Wallet and terminated the developer accounts associated with these apps. Apple also stated that developers can file infringement disputes with its legal department, and users can report fraudulent or deceptive content in the App Store.
Additional information:According to data disclosed by Apple, the company had previously banned 193,000 developer accounts due to fraud issues and rejected more than 371,000 counterfeit, spam, or misleading app submissions last year, blocking more than $2.2 billion in potential fraudulent transactions.
