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

One plaintiff reported the app to Apple; another downloaded it nine days later and lost $840,000, according to the complaint.

Sparrow Wallet developer Craig Raw has publicly warned about copycat iOS apps since January 2024.

The complaint, filed on July 24 in the Northern District of California, includes eight counts, among them fraud, negligent misrepresentation, and strict products liability.

According to the filing, each plaintiff entered a seed phrase into the app. James Ramirez lost 7.4 BTC, valued in the complaint at $875,000; Christopher Ellis lost $840,000; and Jalen Delgado lost 1.05 BTC, valued at $120,000. Sparrow Wallet only runs on Windows, macOS, and Linux and has never released an iOS version, meaning any App Store listing under that name would be impersonating the real product.

Ramirez reported the app and his loss to Apple on July 25, 2025, the same day it occurred. Ellis downloaded a Sparrow app from the App Store nine days later. The complaint says no one from Apple has contacted Ramirez about his report, and that fraudulent Sparrow apps were still available when the lawsuit was filed. The filing also alleges, on information and belief, that Apple ranked the fake app and placed it in curated cryptocurrency collections, "effectively recommending a fraudulent application to consumers alongside legitimate ones."

That allegation matters because crypto wallets are used to hold private credentials, so a deceptive app can create immediate and irreversible loss if users disclose a seed phrase. It also places the dispute in the broader context of app-store review and curation, where users may rely on rankings, categories, and storefront placement to judge whether a tool is legitimate.

The developer’s warning

Craig Raw, who created Sparrow Wallet and holds the U.S. trademarks for the name, has been flagging copycat malware on Apple's App Store since January 2024, when he said a scam version remained live weeks after it had been reported.

"There is still a scam ‘Sparrow Wallet’ app on the @Apple App Store, despite myself and others having reported it weeks ago. Worse, you have to install it to report it. Always go to the wallet’s website to find the link to download it. App stores will not protect you. — Craig Raw 🐦 (@craigraw) January 6, 2024"

Raw later said he submitted an App Store listing intended only to tell iOS users that Sparrow is desktop-only. Apple rejected it as "placeholder content," then flagged his developer account for termination over "dishonest activity," a decision he said was later reversed on appeal.

Apple declined to comment on the lawsuit to TechCrunch, instead pointing to its latest ecosystem analysis, which said the company rejected more than 371,000 malicious App Store submissions. Apple also said there are currently no Sparrow Wallet copycats on the App Store.

Count seven of the complaint asks the court to treat the App Store as a product placed into the stream of commerce, which would expose Apple to strict liability for failing to warn. The filing argues that Apple's disclaimers are buried "deep within" click-through terms.