admin The complaint, filed on July 24 in the US District Court for the Northern District of California, accuses Apple of negligence, misrepresentation and failing to adequately review or monitor applications offered through its tightly controlled digital marketplace.
James Ramirez, Christopher Ellis and Jalen Delgado allege that they downloaded an application impersonating Sparrow Wallet, a legitimate open-source Bitcoin wallet designed only for desktop computers. The authentic software is available for Windows, macOS and Linux, but has no version for the iPhone or other iOS devices.
The fake application allegedly instructed users to enter their cryptocurrency seed phrases, the confidential sequences of words used to recover and control digital wallets. Anyone obtaining a seed phrase can access the associated assets and transfer them without the owner’s permission.
Delgado downloaded the application around May 1, 2025, and allegedly lost 1.05033242 Bitcoin, then valued at approximately $120,000. Ramirez installed it on July 25 and lost 7.4 Bitcoin worth about $875,000, while Ellis downloaded it around August 3 and reported losses of roughly $840,000.
The combined value cited in the complaint is approximately $1.84 million, although cryptocurrency prices can change sharply between the date of a theft and the filing of a legal claim.
Ramirez reported the application and the transfer to Apple on the day he discovered the loss, the lawsuit says. Ellis also contacted the company after his assets disappeared. Both allege that Apple failed to respond to their reports, while the application remained available long enough to affect additional users.
The investors contend that Apple’s role extended beyond providing a distribution platform. Their complaint alleges that the fraudulent Sparrow application appeared prominently in search results and was included in curated cryptocurrency collections alongside legitimate financial products, giving it added credibility.
They argue that users reasonably trusted the listing because Apple repeatedly promotes the App Store as a secure and carefully reviewed marketplace. Apple generally prevents iPhone owners from installing software through unrestricted external channels, making its approval process central to how consumers assess an application’s legitimacy.
The lawsuit seeks reimbursement for the stolen cryptocurrency, compensatory and punitive damages, and other relief that could include multiplied damages. The plaintiffs have requested a jury trial and want Apple to strengthen its review controls and disclose that an App Store listing does not guarantee that a cryptocurrency application is authentic.
Apple said it had removed applications impersonating Sparrow Wallet and terminated the developer accounts associated with them. The company also pointed to reporting systems through which customers can flag suspected fraud and developers can submit intellectual-property complaints.
The case nevertheless raises questions about how quickly those reports are investigated, particularly where an application requests recovery phrases or other credentials that can provide immediate access to high-value digital assets.
Craig Raw, the developer of the authentic Sparrow Wallet, had publicly warned about counterfeit mobile versions well before the three alleged thefts. He said in January 2024 that a fake Sparrow application remained available after being reported for several weeks and advised users to obtain the wallet only from its official website.
Raw later created a placeholder iOS application intended to warn consumers that Sparrow was desktop-only and that mobile products using its name were fraudulent. Apple initially flagged his developer account over alleged dishonest activity before reversing that action.
The dispute comes as Apple highlights the scale of its anti-fraud operations. The company says its teams reviewed more than 9.1 million app submissions during 2025 and rejected over two million for violating its guidelines. Those included more than 371,000 copycat, spam or misleading submissions and over 443,000 applications rejected for privacy violations.
Apple also terminated 193,000 developer accounts over fraud concerns, blocked 1.1 billion fraudulent customer-account creation attempts and prevented more than $2.2 billion in potentially fraudulent transactions during the year. Its App Store serves more than 850 million visitors each week across 175 storefronts.
