Three Apple customers have sued the company after allegedly losing more than $1.8 million in Bitcoin through a fraudulent cryptocurrency wallet downloaded from the App Store. The complaint argues that Apple failed to prevent an app impersonating Sparrow Wallet from reaching users despite promoting its review process as a major security advantage.
The lawsuit was filed on Friday in the US District Court for the Northern District of California. Plaintiffs James Ramirez, Christopher Ellis and Jalen Delgado are seeking repayment of their losses, additional damages and a jury trial.
Users Downloaded an Unofficial Mobile Wallet
The plaintiffs said they downloaded an iOS app using the Sparrow Wallet name and transferred Bitcoin into it. Ramirez allegedly lost about $875,000, Ellis lost approximately $840,000 and Delgado lost around $120,000.
The legitimate Sparrow Wallet is a desktop Bitcoin application available for Windows, macOS and Linux. Its official download page does not offer an iPhone or Android version.
According to the complaint, the fraudulent app collected information that allowed its operators to transfer the users’ cryptocurrency to wallets they controlled. The allegations have not yet been tested in court, and Apple has not been found liable.
Complaint Challenges Apple’s App Store Safety Claims
The lawsuit focuses on Apple’s longstanding argument that its control over iOS app distribution protects customers from malware, impersonation and fraud. Apple has frequently cited security risks when opposing sideloading and third-party app stores.
The plaintiffs claim users reasonably relied on Apple’s review process when deciding the Sparrow app was safe. They also allege that Apple had been warned about fake versions of the wallet before their losses occurred.
Sparrow creator Craig Raw previously criticised Apple publicly for allowing apps impersonating his software to remain available after they had been reported. The complaint asks Apple to provide clearer warnings about the possibility of fraudulent applications appearing in the App Store.
Apple Defends Its Review Process
Apple declined to comment on the pending litigation but said apps that impersonate other products violate its guidelines. The company added that it acts quickly to investigate and remove fraudulent software and that no Sparrow Wallet copycats were currently available.
Apple’s latest App Store fraud report said it prevented more than $2.2 billion in potentially fraudulent transactions during 2025. It also rejected more than 371,000 submissions that copied other apps, contained spam or otherwise misled users.
The case could test how much responsibility an app marketplace has when its review systems approve software later accused of impersonating a legitimate financial product.
Featured image credits: Flickr
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