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crypto.news 2025-04-15 06:20:48

Phantom Wallet sued following a $500K memecoin exploit caused by an alleged security flaw

Phantom Wallet sued following a $500K memecoin exploit caused by an alleged security flaw

Crypto wallet provider Phantom is facing a lawsuit after an alleged security flaw allowed hackers to steal over $500,000 worth of Wiener Doge memecoin tokens. The complaint, filed on Apr. 14 in New York by attorney Thomas Liam Murphy and 13 others, accuses Phantom of negligence, fraud, and deceptive practices. According to the filing, a hacker accessed Murphy’s private key by extracting it from Phantom’s browser extension memory, a vulnerability the company allegedly knew about but never fixed or disclosed. Once inside, the attacker drained three Phantom wallets without needing to bypass two-factor authentication. The attacker used Phantom’s built-in “ Swapper ” feature to convert the stolen memecoins into Solana ( SOL ) using OKX’s smart contract routing. The incident caused the price of Wiener Doge, a Solana-based meme token created by Murphy, to collapse. The coin had reached a valuation of over $1 million before the theft but is now worth less than one cent per token. You might also like: Phantom acquires NFT data platform SimpleHash to enhance wallet features The plaintiffs further allege that Phantom handled billions of swaps, collected fees, and put users at significant risk, functioning more like an unregistered trading platform than a simple wallet. Because of its alleged involvement in facilitating the swaps and its history of money laundering violations, OKX has also been named as a co-defendant in the case. Phantom has not yet publicly addressed the accusations. As more retail users join the web3 space, this lawsuit highlights serious issues regarding the marketing, regulation, and security of cryptocurrency wallets with integrated trading capabilities. In the past year, Phantom has experienced the fastest growth among web3 wallets, according to a February report by CoinMarketCap. The wallet has attracted more than 15 million active users, facilitating token swaps worth over $20 billion in 2024 alone. Phantom raised an additional $150 million at a $3 billion valuation in a Series C round in January. Additionally, the wallet has recently added support for rapidly growing networks like Sui ( SUI ) and Base. Read more: Crypto malware silently steals ETH, XRP, SOL from wallets

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https://www.digistore24.com/redir/325658/ceobig/
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