A federal lawsuit alleges Apple left a fraudulent bitcoin wallet on the App Store for more than a week after a user reported an $875,000 theft, allowing another customer to lose roughly $840,000 before the app was removed. The case, filed July 24 in the Northern District of California, argues that Apple’s curated marketplace marketing created a false sense of security that the company’s review process would catch impersonators, a premise the plaintiffs say cost three people a collective $1.84 million.
The suit centers on an app masquerading as Sparrow Wallet, a legitimate desktop-only product with no iOS version. James Ramirez says he downloaded the fake on July 25, 2025, entered his seed phrase and watched 7.4 BTC vanish the same day; he reported the loss to Apple immediately. Christopher Ellis installed the app on August 3 and lost about $840,000. Jalen Delgado, who downloaded it around May 1, lost 1.05 BTC worth roughly $120,000 at the time. Ramirez and Ellis say Apple never responded to their reports.
The timeline is the plaintiffs’ strongest evidence. If Ramirez’s alert reached Apple on July 25 and Ellis was still able to download the app nine days later, the review machinery either failed to flag a known scam or chose not to act. The complaint adds that Sparrow developer Craig Raw warned Apple in January 2024 that an impersonator was live, and that Apple ranked the fake app and placed it in curated cryptocurrency collections alongside legitimate products, effectively vouching for it.
Apple has been here before. In 2021 a federal judge dismissed a nearly identical suit, ruling that Apple acts as a publisher of third-party content and cannot be held liable for a fraudulent wallet app. That precedent hangs over the new filing, which brings eight claims including consumer-protection violations, fraudulent misrepresentation and failure to warn. The plaintiffs are asking a court to decide that curating and ranking apps crosses the line from passive hosting into active endorsement.
Apple told MacRumors it has since removed the Sparrow impersonators and terminated the associated developer accounts. The company cited its broader enforcement record: 193,000 developer accounts terminated for fraud, more than 371,000 copycat or misleading submissions rejected last year, and over $2.2 billion in potentially fraudulent transactions stopped. Those numbers are real, but they are also the standard defense, a tally of what was caught, offered in response to a lawsuit about what was missed.
The plaintiffs want reimbursement, multiplied damages and a court order forcing Apple to disclose the limits of its review process and warn users that an App Store listing does not guarantee a crypto app’s authenticity. Whether a judge buys the distinction between publisher and curator will determine if the walled garden owes a duty of care to the people who trusted the gate.