Business

Phantom Sued After Hacker Exploits Critical Security Flaw

Attorney Liam Murphy and a group of investors have filed a lawsuit against Phantom Technologies and OKX, alleging that a security flaw in Phantom’s crypto wallet led to the theft of over $500K and the collapse of Murphy’s digital asset project, Wiener Doge.

Haider Jamal
April 15, 2025

False Advertising

Filed in the Southern District of New York, the complaint accuses Phantom of falsely advertising its wallet as secure while knowingly storing decrypted private keys in browser memory, a flaw exploited by hackers on January 20th.

Source: U.S. District Court (Southern District Of NY)

The attacker allegedly drained Murphy’s funds and used Phantom’s “Swapper” tool to convert them to Solana (SOL), causing Wiener Doge to crash 99% in value, from $3.10 per token to under $0.01.

Failure To Act

The lawsuit claims Phantom was aware of the risks and failed to act, and that OKX enabled the token liquidation by providing trading infrastructure. The suit includes claims of negligence, false advertising, and aiding money laundering.

Thirteen additional plaintiffs, mainly consisting of Murphy’s friends and family, joined the case, seeking damages at $3.10 per lost token.

Join Our FREE Newsletter

Subscribe to stay informed and receive latest updates on the latest happenings in the crypto world!

By submitting this form, you are consenting to receive marketing emails from: Crypto Weekly, 36 Blue Jays Way, Toronto, ON, M5V 3T3, http://cryptoweekly.co. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Haider Jamal

Content Strategist

Haider is a fintech enthusiast and Content Strategist at CryptoWeekly with over four years in the Crypto & Blockchain industry. He began his writing journey with a blog after graduating from Monash University Malaysia. Passionate about storytelling and content creation, he blends creativity with insight. Haider is driven to grow professionally while always seeking the next big idea.