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Apple kept fake bitcoin wallet on App Store after $875,000 theft report, lawsuit alleges
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Apple Inc. faces a federal lawsuit alleging it allowed a fraudulent bitcoin wallet app to remain on its App Store for over a week after a user reported an $875,000 theft, enabling another user to lose approximately $840,000. The complaint, filed July 24 in the U.S. District Court for the Northern District of California, highlights ongoing concerns about App Store security for cryptocurrency applications.
The three plaintiffsāJames Ramirez, Christopher Ellis, and Jalen Delgadoāclaim they collectively lost about $1.84 million after downloading an app impersonating Sparrow Wallet and entering their seed phrases. They argue that Appleās marketing led them to believe apps in its tightly controlled marketplace were thoroughly vetted and safe. The lawsuit brings eight claims, including violations of consumer-protection laws, fraudulent misrepresentation, and failure to warn.
Ramirez alleges he downloaded the app on July 25, 2025, and had 7.4 BTC, then worth approximately $875,000, stolen. He reported the theft to Apple the same day but received no response, according to the filing. Ellis lost about $840,000 after installing the app on August 3, while Delgado lost 1.05 BTC, worth about $120,000, around May 1. The official Sparrow Wallet is a desktop-only application with no iOS version.
The lawsuit alleges that Apple ranked the fraudulent app and included it in curated cryptocurrency collections alongside legitimate products. It also cites a warning from Sparrow developer Craig Raw in January 2024 that an impersonator remained available despite being reported to Apple weeks earlier. This case follows a similar 2021 lawsuit that was dismissed, with a judge agreeing that Apple was not liable as a publisher under Section 230 of the Communications Decency Act.
Apple told MacRumors that it has removed all apps impersonating Sparrow Wallet and terminated associated developer accounts. The company emphasized that developers can submit infringement disputes and customers can report scams or fraud. Apple also noted it previously terminated 193,000 developer accounts over fraud and rejected over 371,000 misleading submissions last year, stopping over $2.2 billion in potentially fraudulent transactions.
The plaintiffs seek reimbursement of stolen assets, compensatory and punitive damages, and demand that Apple disclose the limitations of its review process and strengthen controls. They also want Apple to warn users that an App Store listing does not guarantee a cryptocurrency app's authenticity. The outcome of this case could set a significant precedent for Appleās liability for third-party apps on its platform.
