Apple is facing a federal lawsuit from three individuals who say they lost a combined $1.8 million in Bitcoin after downloading a fraudulent cryptocurrency wallet from the App Store. The complaint, filed July 24 in the U.S. District Court for the Northern District of California, accuses the company of negligence in reviewing and monitoring apps while promoting its marketplace as uniquely secure.

The plaintiffs—James Ramirez, Christopher Ellis, and Jalen Delgado—downloaded an app presented as Sparrow Wallet. The legitimate Sparrow Wallet is a desktop application available only for Windows, macOS, and Linux and has never been released for iOS. The fake version allegedly prompted users to enter their seed phrases, after which their Bitcoin was transferred to wallets controlled by scammers.

Details of the Losses

According to the filing, Jalen Delgado installed the app around May 1, 2025, and lost approximately 1.05 Bitcoin valued at about $120,000. James Ramirez downloaded it on July 25, 2025, and reported losing 7.4 Bitcoin worth roughly $875,000. Christopher Ellis installed the same app around August 3, 2025, and lost about $840,000 in cryptocurrency. Combined losses totaled approximately $1.835 million.

The complaint states that the plaintiffs trusted the App Store because of Apple’s long-running marketing that positions its platform as safer than competing stores due to exclusive control and pre-publication review. They argue they would not have used the devices or downloaded the app if they had known the safety claims were incomplete.

Prior Warnings and Developer Concerns

The lawsuit notes that Craig Raw, the developer of the genuine Sparrow Wallet, had publicly reported fake versions on the App Store more than a year earlier. In a January 2024 post, Raw stated that a scam Sparrow Wallet app remained available despite reports from him and others weeks earlier. He has repeatedly advised users to download the software only from the official website.

More recently, Raw submitted a placeholder app intended to warn potential downloaders that any iOS version using the Sparrow Wallet name was fraudulent. Apple initially flagged his developer account for alleged dishonest activity and threatened termination, though the company later reversed that decision. The complaint also claims Apple ranked the fraudulent app and featured it in curated cryptocurrency collections.

Plaintiffs say they reported the thefts and the app to Apple, but allege the company took insufficient action. They contend multiple fake Sparrow Wallet apps continued to appear over time.

Apple’s Response

Apple said it acted quickly to remove apps impersonating Sparrow Wallet and terminated the associated developer accounts. The company stated that no Sparrow Wallet copycats currently appear on the App Store. Impersonation apps violate its guidelines, and it takes swift action when such violations are identified.

Apple directed developers who believe content infringes their intellectual property to submit disputes through its legal channels and noted that customers can report suspected scams via its Report a Problem service. The company pointed to its 2025 figures showing it rejected more than 371,000 submissions that copied other apps, constituted spam, or misled users, and prevented more than $2.2 billion in potentially fraudulent transactions.

What the Plaintiffs Seek

The three individuals are requesting a jury trial. They seek reimbursement for the stolen Bitcoin, compensatory and punitive damages, restitution, attorneys’ fees, and other relief under California’s Consumers Legal Remedies Act and additional state consumer protection laws. They also ask the court to order Apple to improve and publicly disclose its procedures for detecting and removing fraudulent applications and to provide clearer warnings about risks associated with cryptocurrency apps.

The case centers on whether Apple’s control of the App Store and its public safety claims create legal responsibility when malicious apps reach users despite the review process. The lawsuit does not allege that Apple itself took the funds, but that its systems and representations enabled the losses.