Crypto pockets supplier Phantom is going through a lawsuit after an alleged safety flaw allowed hackers to steal over $500,000 value of Wiener Doge memecoin tokens.
The grievance, filed on Apr. 14 in New York by legal professional Thomas Liam Murphy and 13 others, accuses Phantom of negligence, fraud, and misleading practices. In accordance with the submitting, a hacker accessed Murphy’s personal key by extracting it from Phantom’s browser extension reminiscence, a vulnerability the corporate allegedly knew about however by no means mounted or disclosed.
As soon as inside, the attacker drained three Phantom wallets while not having to bypass two-factor authentication. The attacker used Phantom’s built-in “Swapper” characteristic to transform the stolen memecoins into Solana (SOL) utilizing OKX’s sensible contract routing.
The incident induced the value of Wiener Doge, a Solana-based meme token created by Murphy, to break down. The coin had reached a valuation of over $1 million earlier than the theft however is now value lower than one cent per token.
The plaintiffs additional allege that Phantom dealt with billions of swaps, collected charges, and put customers at important danger, functioning extra like an unregistered buying and selling platform than a easy pockets. Due to its alleged involvement in facilitating the swaps and its historical past of cash laundering violations, OKX has additionally been named as a co-defendant within the case.
Phantom has not but publicly addressed the accusations. As extra retail customers be a part of the web3 house, this lawsuit highlights severe points relating to the advertising and marketing, regulation, and safety of cryptocurrency wallets with built-in buying and selling capabilities.
Up to now 12 months, Phantom has skilled the quickest development amongst web3 wallets, in response to a February report by CoinMarketCap. The pockets has attracted greater than 15 million energetic customers, facilitating token swaps value over $20 billion in 2024 alone.
Phantom raised a further $150 million at a $3 billion valuation in a Sequence C spherical in January. Moreover, the pockets has lately added assist for quickly rising networks like Sui (SUI) and Base.
