Apple Gets Sued for $1.8M Sparrow Wallet Scam — Seed Phrases, Meet Court Papers 🪶

Three Bitcoin holders are suing Apple over a fraudulent Sparrow Wallet application they say drained a combined $1.8 million from their accounts, according to a complaint filed Friday in the US District Court for the Northern District of California. The plaintiffs, James Ramirez, Christopher Ellis and Jalen Delgado, alleged they entered their seed phrases into a fake wallet distributed through the App Store, allowing scammers to transfer their $BTC during 2025. Court filings list individual losses of approximately $875,000, $840,000 and $120,000 for Ramirez, Ellis and Delgado, respectively.

The complaint argues Apple promoted the App Store as a trusted marketplace while failing to adequately vet and monitor submitted applications, with a copy of the filing obtained by MacRumors. Sparrow Wallet developer Craig Raw has previously criticized Apple over counterfeit versions of the open-source wallet appearing on iOS, noting that the legitimate software is offered only on Windows, macOS and Linux and has no official iPhone build.

Apple told MacRumors it has removed the impersonating Sparrow Wallet applications and terminated the developer accounts associated with them. The company said developers and users can report apps that violate its guidelines and that it takes action against apps not in compliance with App Store rules.

The lawsuit adds to a broader pattern of impersonation cases targeting crypto software on mobile marketplaces, including recent reports that Binance disappeared from Google Play in certain EU countries. Sparrow Wallet remains available through its official channels on desktop operating systems, and Raw has continued to publicly flag fraudulent iOS listings tied to the project.