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Lawsuit alleges Apple let fake Sparrow Bitcoin wallets steal $1.8M

Plaintiffs say Apple was warned for more than two years about Sparrow impersonators, yet the apps allegedly remained on the App Store into 2025.

Reported · Written up by our desk · Regulation

Apple’s App Store is facing renewed legal scrutiny after three Bitcoin holders alleged they lost a combined $1.8 million to fake crypto wallets impersonating Sparrow Wallet, according to a lawsuit filed July 24 in California and reported by CryptoSlate.

The complaint argues Apple did not adequately review and remove applications impersonating Sparrow while the App Store is positioned as a trusted channel for software. It also points to earlier warnings, including that Sparrow founder Craig Raw flagged unauthorized mobile versions of the wallet beginning in early 2024.

The suit ties alleged thefts to specific victims and dates. One plaintiff, Jalen Delgado, reportedly downloaded a Sparrow impersonator in May 2025 and, after providing a seed phrase, lost just over 1 BTC, valued at about $120,000; James Ramirez allegedly lost 7.4 BTC, worth roughly $875,000, after using another impersonator on July 25, 2025.

A third plaintiff, Christopher Ellis, allegedly entered a recovery phrase into a Sparrow app found through the App Store nine days later and lost assets valued at about $840,000. The complaint also claims Apple was more than just a distributor, alleging the platform ranked the Sparrow impersonator, and it contends Apple had received fresh reports connecting specific fake wallets to major Bitcoin thefts before later victims were targeted.

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