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Apple faces lawsuit over fake Sparrow Wallet app draining $1.8M in Bitcoin

The complaint, filed July 24 in Northern District of California, alleges plaintiffs entered seed phrases into an iOS impersonation despite Sparrow Wallet being desktop-only.

Reported · Written up by our desk · Regulation

Three Bitcoin holders have sued Apple in California federal court, alleging a counterfeit Sparrow Wallet iOS app drained a combined $1.8 million, according to Decrypt.

The filing says one plaintiff reported the app to Apple the day of the incident, while another downloaded a similar listing nine days later and lost $840,000. It alleges each plaintiff entered a seed phrase into the app.

The lawsuit, filed on July 24 in the Northern District of California, includes eight counts such as fraud, negligent misrepresentation, and strict products liability. It names losses tied to 7.4 BTC valued at $875,000 for James Ramirez, $840,000 for Christopher Ellis, and 1.05 BTC valued at $120,000 for Jalen Delgado.

Sparrow Wallet’s developer, Craig Raw, has previously flagged copycat iOS apps since January 2024 and said Sparrow Wallet has never shipped an iOS version. Decrypt reports Apple did not comment on the lawsuit to TechCrunch, pointing instead to an ecosystem analysis that it rejected more than 371,000 malicious App Store submissions. It said there were no Sparrow Wallet copycats on the App Store at the time of that analysis.

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