A lawsuit filed Monday in opposition to Phantom Applied sciences alleges that safety vulnerabilities in its crypto pockets, Phantom, led to the theft of over $500,000 value of Wiener Doge (WIENER) tokens from a developer's account.
A cybercriminal "hacked into Liam's private laptop and exported Liam's non-public key to his Phantom wallets from his net browser's working reminiscence," a duplicate of the courtroom doc obtained by Decrypt reads.
The attacker gained "unrestricted entry to all the funds in Liam's three co-linked Phantom wallets" with no need to bypass multi-factor authentication, the grievance claimed.
A grievance filed April 14 within the Southern District of New York by crypto legislation agency Murphy's Legislation founding accomplice Thomas Liam Murphy and 13 different plaintiffs alleges that Phantom uncovered customers to malware and crypto theft attributable to basic design flaws, regardless of advertising and marketing its safety as “best-in-class.”
Phantom, valued at over $3 billion and extensively thought to be the go-to pockets for Solana blockchain customers, allegedly saved customers' non-public keys in "unencrypted browser reminiscence," making them weak to extraction by malware.
Checks and limits
Murphy claims he reported the theft to Phantom instantly, however the firm allegedly responded that it operated "a noncustodial pockets," which meant that Murphy bore "sole accountability” for any lack of his crypto.
As a significant crypto pockets, Phantom hosts belongings value roughly $25 billion throughout 10 million lively customers, the lawsuit claims.
It additional alleges a cybercriminal used Phantom's built-in "Swapper" characteristic to liquidate Wiener Doge tokens value roughly $500,000 for under $37,537 in Solana (SOL).
That mass liquidation allegedly destroyed the worth of the complete Wiener Doge challenge, which had reached a market capitalization of $3.1 million at peak, in line with information from GeckoTerminal.
Phantom "lacked any system for transaction velocity checks, geolocation anomalies, or withdrawal limits," evaluating the Solana pockets to how Coinbase wallets function, the grievance reads.
The go well with additionally names OKX, a crypto alternate that partnered with Phantom in November 2024. The grievance cites OKX’s responsible plea to federal cash laundering fees for facilitating $5 billion in illicit transactions.
Phantom's "failure to reveal its direct integration with OKX" was "misleading," the go well with argued.
The plaintiffs are looking for at the very least $3.1 million in damages, claiming Phantom violated the Commodity Change Act by working as an unregistered buying and selling platform whereas evading regulatory oversight by "superficial claims of decentralization."
Phantom has not but issued a public response to the allegations. Phantom, Murphy, and OKX didn’t instantly return Decrypt's request for feedback.
Edited by Sebastian Sinclair
