Bitcoin (BTC) users have lost a combined $1.8 million after downloading fraudulent mobile apps that impersonated a well-known desktop wallet available only on computers.
In a lawsuit filed in the United States District Court for the Northern District of California, San Jose Division, victims accuse Apple of failing to adequately review and remove applications masquerading as the Sparrow Wallet mobile app, while promoting the App Store as a safe and trusted source for software.
The victims claim that they entered their recovery phrases into a fake Sparrow Wallet app, allowing thieves to drain their holdings.
Sparrow founder Craig Raw had been warning about unauthorized versions of the app carrying the same name as early as 2024. Sparrow is a desktop-only wallet, and a mobile version of the application could have been easily flagged as fraudulent.
One plaintiff, James Ramirez, claims thieves drained roughly $875,000 in BTC after using the fake wallet and notes that he notified Sparrow and Apple the same day. Another user, Christopher Ellis, alleges that he encountered a similar app days later and thieves stole $840,000 in crypto.
Meanwhile, Jalen Delgado alleges that he lost about $120,000 in Bitcoin after downloading a fake Sparrow Wallet in May 2025.
Security researchers earlier identified 26 comparable fraudulent wallets mimicking brands such as MetaMask and Ledger, many capable of capturing seed phrases through phishing tactics.
The real Sparrow Wallet operates exclusively on Windows, macOS, and Linux with no official mobile release.
Apple states it has removed the fake Sparrow apps and closed the associated developer accounts while emphasizing its existing fraud detection measures.
The plaintiffs argue that marketing claims about App Store safety encouraged trust in the impostors and seek damages, reimbursement, restitution, and legal fees.
“Despite its extensive marketing efforts, Apple has failed to devote the necessary attention and oversight to adequately review and monitor applications distributed through the App Store. This failure has allowed cybercriminals to exploit the trust, and reputation, Apple has cultivated, resulting in the theft of funds from Apple’s own customers. Absent Apple’s knowing participation and meaningful support, these cybercriminal schemes could not have been carried out or brought to completion.”
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