Apple knew about a fake wallet app for a year — and didn't pull it

Apple has spent years promising that every app on the App Store is "reviewed by experts." Reality, according to a new lawsuit, looked different: a fake "Sparrow Wallet" app sat in the store for over a year after the first complaints, before it was used to steal $1.8 million in Bitcoin from at least three people.

On July 24, three users — James Ramirez, Christopher Ellis, and Jalen Delgado — filed suit against Apple in federal court for the Northern District of California, CoinDesk reports. The real Sparrow Wallet only exists as desktop software for Windows, macOS, and Linux — there's no iOS version at all, so any app by that name on the App Store was a fake by definition. The fraudulent version prompted users to "import" an existing Bitcoin wallet by typing in a 12- or 24-word seed phrase — the data was sent straight to attacker-controlled servers, which drained the funds immediately.

• James Ramirez — 7.4 BTC, downloaded the app on July 25, 2025
• Christopher Ellis — roughly $840,000, installed the app on August 3, 2025
• Jalen Delgado — 1.05 BTC (about $120,000 at the time, around May 1, 2025)

“there is still a scam 'Sparrow Wallet' app on the @Apple App Store, despite myself and others having reported it weeks ago.”

— Craig Raw, founder of Sparrow Wallet

Quote source: [MacRumors](https://www.macrumors.com/2026/07/27/apple-app-store-fake-bitcoin-wallet-lawsuit/).

Raw had been warning Apple about fake mobile versions of his wallet since January 2024 — more than a year and a half before the lawsuit was filed, MacRumors notes. According to the plaintiffs, Apple didn't act even after one user reported an $875,000 theft — the app stayed in the store, and another person lost money through it afterward.

We've covered the difference between a hot wallet and a cold wallet, and why typing a seed phrase into any unfamiliar app is a fundamental risk regardless of where it was downloaded from — hot wallet vs. cold wallet: the nuance most explainers skip; that's exactly the weakness the fake Sparrow Wallet exploited.

Apple already has a precedent working in its favor: in a similar 2021 case, a federal judge agreed the company acts as a publisher of content rather than its creator, and isn't liable for what a third-party app contains. The new suit tries to work around that defense with eight separate claims — from consumer protection violations to fraudulent misrepresentation — leaning specifically on the argument that Apple knew about the problem in advance and kept featuring the app in curated crypto-wallet collections anyway.

Apple told MacRumors it removed the fake apps and terminated the associated developer accounts; by the company's own numbers, it rejected over 371,000 clones and misleading submissions last year and blocked $2.2 billion in potentially fraudulent transactions.

Those numbers look impressive, but this specific app — the one people had been explicitly warning about for over a year — stayed available for download the entire time.

*This piece is informational, not a recommendation to buy, sell, or hold any asset.*