The lawsuit filed Monday against Phantom Technologies alleges that Phantom, a security vulnerability in Crypto Wallet, caused the theft of more than $500,000 in Wiener Doge (Wiener) tokens from developer accounts.
The cybercriminal was hacked onto Liam’s personal computer and exported Liam’s private key from working memory in his web browser to his phantom wallet.” copy of court documents obtained by Decryption I’ll read it.
The attacker gained “unlimited access to all funds in Liam’s three co-linked phantom wallets,” the complaint alleges.
A complaint filed by Murphy, a crypto law firm in the Southern District of New York, alleges that the Phantom has exposed users to malware and crypto theft due to basic design flaws, despite selling security as “the best class.”
phantomIt has exceeded $3 billion and is widely regarded as the go-to wallet for Solana blockchain users, storing users’ private keys in “unencrypted browser memory” making them vulnerable to malware extraction.
Checks and restrictions
Murphy claims he immediately reported the theft to the Phantom, but the company is said to have responded that it operates a “non-cattodial wallet.”
As a leading crypto wallet, Phantom hosts approximately $25 billion worth of assets for 10 million active users, the lawsuit alleges.
Additionally, Phantom’s built-in “swapper” feature used by cybercriminals will liquidate Wiener Doge tokens worth around $500,000 for just $37,537.
That mass liquidation is said to have destroyed the value of the entire Wiener Doge project, which reached a market capitalization of $3.1 million at its peak. data From Geckoterminal.
Phantom says “We didn’t have a system of transaction speed checks, geographical anomalies, or withdrawal restrictions,” and when you compare the Solana wallet to how the Coinbase wallet works, the complaint is read aloud.
The lawsuit also named Okx, a crypto exchange that partnered with Phantom in November 2024. Complaints quote OKX Guilty plea to federal money laundering fees for promoting $5 billion in illegal transactions.
Phantom’s “failure to disclose direct integration with OKX” was “deceitful,” the lawsuit alleged.
The plaintiffs are seeking at least $3.1 million in damages, claiming that Phantom violated the Goods Exchange Act by operating as an unregistered trading platform, while avoiding regulatory oversight through “superficial claims of decentralization.”
Phantom has not yet issued a public response to the claim. Phantom, Murphy, and Okx didn’t return anytime soon Decrypt’s Request a comment.
edit Sebastian Sinclair
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