JUST IN: Phantom Technologies Sued Over Alleged Wallet Vulnerabilities
Phantom Technologies is facing a lawsuit in the Southern District of New York over serious wallet security concerns. Attorney Thomas Liam Murphy and 13 plaintiffs accuse the company of gross negligence, fraud, and deceptive practices after a hacker allegedly exploited a major flaw, stealing over $500,000 in crypto.
According to the lawsuit, Phantom stored users’ private keys in unencrypted browser memory, making them vulnerable to malware. The attacker reportedly accessed three wallets without bypassing multi-factor authentication and used Phantom’s Swapper feature to liquidate stolen Wiener Doge tokens into Solana — crashing the token’s value from over $1 million to nearly zero.
The suit also names exchange OKX, alleging it enabled unauthorized swaps. Phantom has denied all claims, emphasizing its noncustodial design and ongoing collaboration with law enforcement.
The case has sparked broader concerns about wallet security as digital assets continue to gain mainstream traction.
