Apple is facing a lawsuit from three victims who alleged that they lost a combined $1.8M because of a fake crypto wallet, Sparrow Bitcoin, on its App Store.
In a lawsuit filed at a Californian court last week, on the 24th of July, the trio (James Ramirez, Christopher Ellis, and Jalen Delgado) said,
Apple failed to warn consumers that spoofed wallet apps, including fake Sparrow applications, had appeared in the App Store and posed a serious risk of theft of cryptocurrency, seed phrases, private keys, wallet credentials, and other sensitive account information.
The plaintiffs claimed that the tech giant failed to warn users not to enter seed phrases or flag the iOS-based Sparrow Wallet as a fake, despite receiving reports of the same.
The original Sparrow Wallet is only available on Windows, macOS, and Linux. However, the wallet is not available on iOS, and scammers jumped at the opportunity to offer a fake lookalike to dupe users into handing over control of their crypto funds.
According to the complaint, the trio lost a total of $1.8M ($875K for Ramirez, $840K for Ellis, and Delgado lost about $120K). The theft happened between May and August last year. The filing added that,
Users found their accounts had been wiped out and their cryptocurrency assets transferred to the scammers’ private wallets.
For the plaintiffs, the scammers succeeded because Apple “exploited the consumer trust” it had cultivated for decades, positioning the App Store as a safe and trusted environment.
Surprisingly, an attempt by Craig Raw, the developer of Sparrow Wallet, to protect users made Apple flag the account for termination instead of helping the situation.
He’s been pushing for the same since 2024, underscoring how slow response can compromise user safety in these app stores.
Cybercrime losses top $20B, led by crypto
The update supports a recent FBI cybercrime report that noted that losses rose 20% to $20B in 2025, largely driven by crypto-related cases. Out of the $20.8B in losses, crypto accounted for $11.4B, translating to more than half of the cases.
Even the crypto industry has been under intensified attacks and exploits amid the ongoing bear market.
Payment infrastructure firm Triple-A lost nearly $10M this month. The overall losses in H1 2026 in the sector alone hit $1.3B, with operations failures, phishing, and social engineering dominating the attack vectors.
Meanwhile, South Korea recently banned 29 foreign exchange apps from the Google Play Store, underscoring how app stores have become a key regulatory tool for compliance enforcement.
That said, the Apple lawsuit could help enhance consumer protections, especially for crypto users leveraging apps. For protocol and DeFi-heavy users, however, one must be more vigilant to protect themselves.
Final Summary
- Apple is facing a $1.8M lawsuit for facilitating a fake Bitcoin Sparrow Wallet in the App Store.
- Cybercrime losses increased by 26% in 2025 to $20B, led by crypto-related cases.
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