Apple App Store crypto scam lawsuit claims users lost $1.8 million
Three users sued Apple after allegedly losing over $1.8 million through a fake Sparrow Wallet app downloaded from the App Store.
By Theo Nakamura · Staff Writer
· 3 min read
Apple is facing an App Store crypto scam lawsuit from three users who say they lost more than $1.8 million after installing a fake crypto wallet from the company’s marketplace. For everyday investors, the case puts a spotlight on a basic risk in crypto custody: if a wallet app is fraudulent, sending Bitcoin to it can mean losing control of the asset.
The complaint was filed Friday in the U.S. District Court for the Northern District of California. The plaintiffs allege Apple was negligent in how it handled App Store security because the fraudulent app, called Sparrow Wallet, was available even though the official Sparrow Bitcoin wallet does not offer an iOS app, according to the complaint.
A crypto wallet is software used to store and manage access to digital assets. In practice, it controls the keys that let a user move cryptocurrency, so downloading an impostor wallet can expose funds to theft if the app is designed to capture or redirect access.
What is Apple accused of in the App Store crypto scam lawsuit?
The plaintiffs say Apple tells consumers that its App Store review process screens apps before release and helps protect users from fraudulent or malicious software. Their lawsuit argues that Apple’s control over which apps can appear on iPhones led users to rely on the company’s safety claims.
According to the complaint, the three plaintiffs moved Bitcoin into the fake Sparrow Wallet app and then lost substantial amounts:
- James Ramirez allegedly lost about $875,000.
- Christopher Ellis allegedly lost around $840,000.
- Jalen Delgado allegedly lost roughly $120,000.
The filing also takes aim at one of Apple’s most repeated defenses of its closed app marketplace: that tighter control makes the iPhone safer than competing platforms. Apple has used that argument in debates over opening the iPhone to third-party app stores and sideloading, which means installing apps from outside Apple’s own App Store.
The complaint cites public criticism from Craig Raw, creator of Sparrow Bitcoin Wallet, who said Apple had allowed fake Sparrow Wallet apps to stay available on the App Store. The plaintiffs allege Apple knowingly hosted fraudulent apps.
The users are asking for a jury trial. They want to recover their alleged losses and other damages, and they are also seeking warnings and disclosures from Apple about risks tied to the App Store, according to the complaint.
How has Apple responded?
Apple declined to comment on the lawsuit. The company told TechCrunch that apps impersonating others violate its guidelines and that it acts quickly to remove them. Apple also said there are currently no Sparrow Wallet copycats on the App Store.
Apple pointed to its latest App Store ecosystem analysis, which said the company rejected more than 371,000 app submissions in 2025 for copying other apps, being spam, or otherwise misleading users.
The lawsuit has not resolved whether Apple is legally responsible for the alleged losses. It does, however, raise a question that matters beyond this one app: how much responsibility a tightly controlled app marketplace has when a fraudulent financial tool slips through review.
This story draws on original reporting from TechCrunch.
