Leading crypto wallet Phantom is being sued after a lawsuit was filed yesterday (April 14) against its parent company, Phantom Technologies.
The lawsuit alleges that security vulnerabilities in its crypto wallet, Phantom, led to the drain of over $500,000 of the Wiener Doge (WIENER) meme coin from a developer’s account.
Phantom Wallet sued over $3m for security issues regarding $WIENER
*Maybe they should see a doctor 🤔 pic.twitter.com/aUmvowm1ic
— Cam (@CryptoNews_eth) April 15, 2025
Phantom Wallet Rejects Murphy’s Claims: Says As A “Noncustodial Wallet” Users Bear “Sole Responsibility” For Any Losses
Crypto law firm Murphy’s Law founding partner Liam Murphy and 13 other plaintiffs filed the complaint yesterday in the Southern District of New York.
The 14 individuals accuse Phantom of exposing its users to malware and crypto theft due to fundamental design flaws despite marketing its security as “best-in-class.”
Per the court documents, a cybercriminal hacked Murphy’s personal computer and exported the lawyer’s private key to his Phantom wallets from his web browser’s working memory.
The lawsuit states that the attacker allegedly gained unrestricted access to all of Murphy’s funds in Murphy’s three co-linked Phantom wallets without bypassing multi-factor authentication.
Phantom is valued at over $3 billion and is the most popular self-custodial wallet for Solana blockchain users. It allegedly stores users’ private keys in “unencrypted browser memory,” making them vulnerable to extraction by malware.
In its defense, Phantom said it gives users full control of their funds and can’t prevent scams from malicious links but works with law enforcement when criminal activity is reported. It also said it offers in-app security education and safety resources.
Murphy claims he reported the theft to Phantom immediately. Still, the company allegedly responded that it operated “a noncustodial wallet,” claiming that Murphy bore “sole responsibility” for any loss of his crypto assets.
The lawsuit claims that Phantom Wallets, one of the leading noncustodial crypto wallets, holds assets worth roughly $25 billion across more than 10 million active users.
RELATED: Solana Whale Scoops 32K into SOL: Whales Bid New Solana Layer 2 – Hidden Secret Play?
Murphy’s Hacked Phantom Wallet Led To The Demise Of The Wiener Doge (WIENER) Meme Coin
The lawsuit further alleges that the hacker used Phantom’s built-in “Swapper” feature to liquidate WIENER tokens worth around $500,000 for only $37,537 in SOL.
Using the swapper feature caused a mass liquidation that allegedly destroyed the value of the entire Wiener Doge project. At its peak, according to GeckoTerminal, WIENER had reached a market cap of $3.15 million.
Currently, WIENER has a market cap of $12,750, but even though it seems to be a dead project, it has processed over $300,000 in daily trading volume across 2477 transactions.
The complaint says that Phantom “lacked any system for transaction velocity checks, geolocation anomalies, or withdrawal limits,” comparing the Solana wallet to how Coinbase wallets operate.
Another entity mentioned in the suit is OKX, the leading centralized exchange. The complaint cites OKX’s guilty plea to federal money laundering charges for facilitating $5 billion in illicit transactions.
The suit argues that Phantom’s “failure to disclose its direct integration with OKX” was “deceptive.”
At least $3.1 million in damages is being sought by the plaintiffs, the market cap of WIENER at the time Murphy was hacked. It claims that Phantom violated the Commodity Exchange Act by operating as an unregistered trading platform while evading regulatory oversight through “superficial claims of decentralization.”
BONUS: Is Solaxy (SOLX) The Saviour That Solana Needs?
With Phantom wallet facing legal troubles and Pump.fun only in the news these days for negative reasons, is a brand new Layer-2 (L2) solution on Solana its final hope?
Crypto investors seem to think so, as Solaxy (SOLX) has just hit an incredible $30 million in presale funding. Not stopping there, capital is still flowing into the project, currently standing at $30.15 million.
Investors are bullish on SOLX as the native token for this new cutting-edge L2 solution. While Ethereum is inundated with L2 chains, Solaxy is the first true L2 solution built to solve a scaling issue the core community has long suffered from.
Solaxy is stepping in to address Solana’s recurring congestion and network instability, which gets unbearable during peak network activity. It works by batching transactions from Solana’s mainnet, processing them off-chain, and sending them back to Solana for completion.
By doing so, SOLX relieves the strain on the Solana network while utilizing the architecture and security that have made it the number one blockchain for meme coins and typical degen activity.
Per DefiLlama, Solana is the number one blockchain by DEX volume, with over $2.5 billion in the past 24 hours, compared to Ethereum at number two with just $1.8 billion.
This level of activity highlights the need for a dedicated L2 solution for Solana, and Solaxy (SOLX) is just what the doctor ordered.
Head to the Solaxy website and simply connect your wallet to learn more. Best Wallet offers the best experience, letting contributors view their SOLX tokens before launch and supporting seamless multichain access across Ethereum and Solana.
Stay up-to-date on all things Solaxy by joining the community on X and Telegram.
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Popular Solana Wallet Phantom Is Being Sued By A Lawyer Who Lost $500,000 In A Hack
- Liam Murphy, a lawyer from New York, had his Phantom wallet hacked and $500,000 WIENER meme coin was stolen
- The hacker dumped the WIENER token for just $37,500, killing the project, which at the peak had a $3.1m market cap
- Murphy is suing for at least $3.1 million as the lawsuit claims Phantom lacks the necessary security features to stop such hacks
- Solaxy (SOLX) is a L2 solution for Solana and has just hit an incredible $30m milestone in presale funding
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