Fake Sparrow Wallet on App Store Tied to $1.8M Theft

Three Bitcoin holders filed a lawsuit in California on July 24, saying counterfeit Sparrow wallet apps on Apple’s App Store led to about $1.8 million in losses. The complaint names three victims and ties specific App Store downloads to the thefts.

The filing says Jalen Delgado downloaded a spoofed Sparrow app in May 2025 and lost just over 1 BTC, about $120,000 at the time. It says James Ramirez lost 7.4 BTC, roughly $875,000, after using a different Sparrow-branded app on July 25, 2025 and reported the app and the theft to Apple that day. Nine days later, Christopher Ellis downloaded an impersonator and lost assets the complaint values at about $840,000.

The plaintiffs contend Sparrow’s developer warned Apple about unauthorized mobile versions more than a year before the losses. The complaint notes Sparrow is a desktop-only wallet, so any iPhone app using its name would be an impersonation. It describes a episode in which the developer submitted an iOS listing to tell users Sparrow had no official mobile version; Apple initially flagged that listing as potentially deceptive and later reversed the warning.

The suit alleges Apple received repeated reports about fake Sparrow apps and that one fraudulent wallet was linked to a major Bitcoin theft before the last plaintiff was targeted. It also alleges the App Store ranked and included a Sparrow impersonator in curated cryptocurrency app collections, increasing its visibility. “Despite multiple reports made to Apple that its App Store hosted fraudulent and dangerous applications, 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,” the filing states.

Security researchers have identified a broader pattern of wallet impersonation on the platform. Investigators found dozens of apps using the names of established wallets. Some campaigns used redirects and phishing pages to prompt users to install developer profiles that then allowed modified wallet software to be installed outside the App Store. Those modified apps can capture seed phrases and other credentials entered by users, letting attackers move assets irreversibly.

Apple told investigators it removed the fraudulent Sparrow apps and terminated the developer accounts responsible. The company pointed to reporting channels that let users and developers flag suspicious software and provided enforcement figures, saying its systems blocked more than $9 billion in potentially fraudulent transactions between 2020 and 2024, rejected nearly 2 million app submissions in 2024 and terminated more than 146,000 developer accounts over fraud concerns that year.

The plaintiffs are seeking reimbursement for the stolen funds, compensatory and punitive damages, restitution and legal fees. They also want Apple to publish procedures for detecting fraudulent apps and to add warnings about risks tied to cryptocurrency apps. The court has not yet resolved whether Apple can be held legally responsible for the losses.