Apple sued over counterfeit Sparrow Wallet app draining $1.8M in Bitcoin
Apple sued over counterfeit Sparrow Wallet app draining $1.8M in Bitcoin, a complaint filed July 24 in the Northern District of California alleges that counterfeit Sparrow Wallet iPhone apps on Apple’s App Store drained $1.8 million in Bitcoin from three plaintiffs. The plaintiffs are James Ramirez (who lost 7.4 BTC, about $875,000), Christopher Ellis (about $840,000), and Jalen Delgado (1.05 BTC, about $120,000).
The lawsuit filed on July 24 in the Northern District of California against Apple includes eight legal claims. These counts entail allegations of fraud, negligent misrepresentation, and strict products liability. The plaintiffs, James Ramirez, Christopher Ellis, and Jalen Delgado, assert that the fraudulent Sparrow Wallet apps were deliberately ranked by Apple within curated cryptocurrency collections on the App Store. This action is claimed to have given unwarranted credibility to the fake app, contributing to the plaintiffs’ significant Bitcoin losses.
Furthermore, the lawsuit contends that Apple’s failure to address the reported impersonations effectively amounted to negligence. The suit also charges Apple with strict liability, arguing that the company’s App Store should be considered a product in the stream of commerce, thereby holding Apple accountable for not sufficiently warning users, as any necessary disclaimers were reportedly hidden in complex click-through agreements. These are part of the broader claim for the oversight and promotion of fraudulent applications.
Sparrow Wallet is desktop-only software that runs on Windows, macOS and Linux and has never shipped an iOS version, so any App Store listing under the Sparrow Wallet name is an impersonation. According to the complaint, plaintiff James Ramirez reported a fake Sparrow app to Apple on July 25, 2025, and plaintiff Christopher Ellis downloaded a Sparrow app from the App Store nine days later. The filing states that fraudulent Sparrow Wallet apps were still listed on the App Store when the complaint was filed. The complaint further alleges Apple did not contact Ramirez after his July 25, 2025 report.
Craig Raw, who built Sparrow Wallet and holds the U.S. trademarks on the name, flagged copycat malware on Apple’s App Store beginning in January 2024. The filing records Raw’s tweets saying a scam Sparrow Wallet app remained on the App Store weeks after reporting it and advising users to download from the wallet’s website rather than the App Store. Apple declined to comment, citing its ecosystem analysis that rejected more than 371,000 malicious App Store submissions. The filing notes there were no Sparrow Wallet copycats on the App Store at the time of that analysis.
Apple declined to comment on the lawsuit, citing an ecosystem security analysis that it said had rejected more than 371,000 malicious App Store submissions. The company did not provide a statement responding to the specific allegations in the complaint. Craig Raw posted tweets warning that a scam Sparrow Wallet app remained on the App Store weeks after he reported copycat listings, and he advised users to download Sparrow Wallet only from the project’s official website rather than from app stores.
One legal argument in the complaint seeks to treat the App Store as a product in the stream of commerce, which the plaintiffs say would expose Apple to strict products liability for failing to warn users about fraudulent applications. The filing asserts that required warnings or disclaimers are buried deep within click-through terms and therefore do not provide adequate notice. Plaintiffs contend that treating the App Store as a product would permit strict liability claims against Apple for harms caused by impersonation or fraudulent listings.
The lawsuit alleges that counterfeit iPhone apps impersonating Sparrow Wallet on Apple’s App Store resulted in significant Bitcoin losses and centers on allegations of impersonation and consumer harm. Plaintiffs say the App Store’s presentation and promotion of those listings increased consumer risk and raise questions about Apple’s App Store security measures. The complaint seeks to hold Apple accountable under legal theories tied to platform responsibility and failure to warn users.
