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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. 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.

Early signs were there. Community called it scams before it turned out to become one. This is first time in the history where scam campaign turned out to be a real scam In practice— and things changed for mantra post last airdrop — and that’s when you needed to reconsider your choice — and you could always do that when you never locked a bias but change it based on developing trends.

they never have to sell

CZ responds to KOL comments: It's ridiculous, they are keen on making up stories to earn traffic CZ responded to the KOL’s previous statement on the X platform, “CZ works for the Federal Reserve, cooperates with the harvesting of the world, and has never been imprisoned.” He said: “This is ridiculous. This Chinese KOL said that I work for the Federal Reserve and I have never been to prison. How I wish this was true. Now Chinese KOLs have a saying: make up a story about Binance or CZ, and you can get a lot of traffic. Today, this guy got 119,000 listeners on X Spaces with this rumor.”

MANTRA investor Shorooq: Neither the fund nor the MANTRA team sold any tokens during the OM crash Shorooq Partners, an investor in MANTRA, posted on the X platform that during the OM price crash, no tokens were sold by the Shorooq Fund, the founding partners, or the MANTRA team. MANTRA also does not have any loopholes, and on-chain data confirms that large-scale forced liquidations were the trigger. The chain reaction occurred during a period of low liquidity, leading to panic selling. Shorooq said that as a long-term equity investor in MANTRA, his belief has never wavered, and his mission is to achieve regulated tokenization of real-world assets on the chain.