OKX

Investors have filed a lawsuit against Phantom and OKX after hackers stole over $500,000 from Liam Murphy's wallet, leading to the failure of the Wiener Doge project.
The lawsuit claims that Phantom stored private keys in the browser's memory and that OKX allowed the token exchange that helped the hacker execute the theft.
Security experts have accused Phantom of ignoring vulnerability reports.

Security Breach Led to Huge Losses
Phantom Technologies and the cryptocurrency exchange OKX are being sued for a security breach that resulted in the loss of over $500,000 in digital assets. The lawsuit, filed in the Southern District of New York, states that Phantom's wallet design exposed users to cyber-attacks.
Liam Murphy, the plaintiff's legal representative, stated that the Phantom browser extension had exploitable holes that hackers used to drain his crypto, leading to the failure of his Solana-based project known as Wiener Doge. After the attack, the value of the token plummeted by nearly 99%, from over $3 million to less than $0.01 per token.

Phantom Mismanaged Wallet Security
According to the lawsuit, Phantom allegedly mishandled the security of its wallet. The company is said to have stored users' decrypted private keys in the browser's memory, which violated basic security protocols, including two-factor authentication.
The allegations suggest that the attacker exploited Phantom's built-in Swapper function to exchange Wiener Doge tokens for Solana (SOL), which ultimately caused the project's collapse. As a result, the price of Wiener Doge, initially $3.10 per token, fell to under $0.01.

OKX Involved in the Theft
The lawsuit also accuses the cryptocurrency exchange OKX of playing an active role in the illegal liquidation of Murphy's account. According to the plaintiffs, OKX's trading infrastructure allowed the hacker to move assets from Phantom using the wallet integration.
The plaintiffs argue that OKX knew that Phantom's Swapper tool operated as an unregistered intermediary with the CFTC. The complaint also claims that the stolen tokens were converted to SOL through OKX's routing and pricing structures. Without OKX's involvement, the hacker would not have been able to liquidate the stolen assets.

Missing Security Protocols
Liam Murphy and 13 other individuals who invested in Wiener Doge are suing for damages based on the token's peak value. They also argue that primary protocols, such as speed checks and geolocation anomaly detection, which should have been implemented on exchanges like Coinbase, were missing.

OKX's History of Legal Issues
The lawsuit also references OKX's previous legal troubles, including its guilty plea in a federal case involving $5 billion in money laundering. This case illustrates the exchange's repeated failure to comply with regulatory standards.

Phantom Ignored Warning About Vulnerabilities
According to the plaintiffs, Phantom was fully aware of the risks of storing private keys in the browser's cache. Security experts argue that Phantom knew new users were frequent targets of phishing attacks and malware, yet failed to act appropriately.

Security Researchers Criticize Phantom
Security researcher Cloakd recently stated that Phantom never responded to him despite informing them about an application flaw. He claimed he waited over 28 days for a response while the risk to users continued to grow. Phantom denied the allegations regarding the compromise of user funds.

Another developer, Andy from Taptrade, supported Cloakd's statements and said that despite submitting several vulnerability reports to Phantom, he never received any reply. Both analysts criticized Phantom for its careless approach to security.
This lawsuit highlights serious security issues that could have long-term consequences for cryptocurrency users, raising questions about whether adequate measures were taken to protect investments from cyber-attacks.

#CryptoScamAlert , #OKX , #CryptoSecurity , #blockchain , #CryptoNewss

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