Users got robbed of $1.8 million by a bitcoin wallet app hosted on the App Store impersonating a legit crypto exchange. The victims are suing Apple.
Apple has a process for conducting reviews of apps before they become available to download from the App Store. While Apple is doing a lot of work to keep users safe, it isn't infallible, and sometimes the results can be expensive.
In a lawsuit filed on July 24 in the U.S. District Court for the Northern District of California, San Jose Division, a trio of plaintiffs have complained about a scam app that managed to reach the App Store.
The app is identified as Sparrow Wallet, which has never been made available on iOS. The legitimate version is available on desktop platforms, including macOS, Windows, and Linux, but not mobile.
The app downloaded by the plaintiffs turned out to be a fake Bitcoin wallet made by a scammer, which misrepresented itself as Sparrow Wallet. Rather than holding cryptographic funds, it instead tricked users into handing over control of their assets, which were then stolen.
The plaintiffs all stored Bitcoin in the app, with James Ramirez claiming to have lost approximately $875,000 in digital assets. Christopher Ellis lost approximately $840,000 the same way, while Jalen Delgado lost $120,000.
In total, the losses total approximately $1.835 million.
While Apple didn't take the crypto, it is being blamed for the situation. The 54-page filing goes at length to outline Apple's marketing of the App Store as a safe and trustworthy place for users to download apps.
The plaintiffs believed Apple doesn't permit apps that violate its developer guidelines. They also insist they wouldn't have purchased Apple's hardware or bought apps if Apple admitted the claims were misleading or false.
The prayer for relief demands a trial by jury, as well as full relief under the Consumers Legal Remedies Act, the Louisiana Unfair Trade Practices and Consumer Protection Law, Massachusetts General Laws Chapter 93A, and others.
That includes compensatory damages covering the lost funds, pre- and post-judgment interest, and enhanced damages where possible. They also want relief to punish Apple for "reckless and grossly negligent conduct."
Rounding out the demands is for Apple to implement better procedures to protect users from spoof apps, and to issue corrective advertising and consumer notices to counter its security claims.
The plaintiffs say they complained to Apple about the fraud, but it apparently didn't do enough in their eyes to fix the situation.
Part of the problem is that, despite its rigorous review process, the App Store does still allow malicious apps to slip through. That meant multiple fake versions of Sparrow Wallet existed in the App Store, which led to the fraud.
It's a long-term problem for the App Store, and one that Sparrow Wallet is familiar with as well. Craig Raw, the developer behind Sparrow Wallet, has documented the issue on X as being a problem since 2023.
Raw tells of multiple users getting in contact after losing savings to the impostors. He also explains that there was an attempt to try and warn users away from using the apps.
Didn't work. App (with the screens below) was rejected for having "placeholder content" and only "demonstrating a concept". pic.twitter.com/kN7o5fto72
That attempt involved creating a placeholder app for the App Store, explaining to would-be downloaders that Sparrow Wallet is a desktop app and that other iOS apps were scams.
The app was flagged and rejected by Apple's systems for being a placeholder and only "demonstrating a concept" rather than being a real app. This led to Raw's own developer account being flagged for "dishonest activity," which also threatened the future development of the macOS version.
The App Review Board later confirmed to Raw that his account wouldn't be terminated.
Throughout this, the scourge of fake apps continues to be a problem, and something Apple seemingly can't keep on top of. AppleInsider has repeatedly warned about the flagrant scam apps that litter the App Store.
This isn't even the first time scammers got away with stealing cryptocurrency.
In April, Mac users downloaded a fake version of the Ledger Live app from the macOS App Store. Approximately 50 users were tricked into giving away seed and recovery phrases.
The result was the thieves stealing around $9.5 million from the users, before Apple managed to remove it from the App Store.
It's a constant battle against the scammers, and one Apple continues to fight. In May 2026, it claimed to have prevented over $2.2 billion in fraudulent transactions in 2025.
But it remains to be seen if losing millions in court will force Apple into making more of an effort.
