Plaintiffs demanded compensation of $3.1 million, suing Phantom Technologies for exposing their holdings to theft. On Monday, April 14, 2025, crypto law firm Murphy’s Law founding partner, Thomas Liam Murphy, and 13 other users lodged a case against the crypto wallet, Phantom, with the Southern District of New York. The complaint alleged that a glitch on the wallet led to a theft of $500,000 worth of Wiener Doge (WIENER) tokens stolen from a developer’s account.
According to the copy of the court document, “Thomas Liam Murphy, Esq. (“Liam”) became a victim of cybercrime when a malicious actor stole his decrypted private key from his browser’s working memory and, without having to bypass two-factor authentication or any security defense from Phantom’s application, obtained unrestricted access to over $500,000 in crypto funds stored inside three of Liam’s Phantom wallets.
In less than five minutes, the cybercriminal executed a handful of obviously fraudulent transactions and liquidated half a million dollars’ worth of crypto property from Liam’s wallet stored in his Phantom application for $37,537, using Phantom’s “Swapper” feature to sell the maximum-possible tokens, as quickly as possible, utilizing Phantom and OKX’s smart contract and automatic liquidity routing protocol, in exchange for Solana (“SOL”)”
A Phantom spokesperson who responded to the allegation stated, “We are aware of the lawsuit that has been filed against Phantom, strongly deny any allegations of wrongdoing, and look forward to demonstrating why this lawsuit should be dismissed.”
Furthermore, Phantom stated that as a non-custodial crypto wallet, it gives the user full control of the asset and can’t prevent scams and malicious links. However, it assured it would comply with the authorities to hunt down the bad actors when an incident is reported. Meanwhile, the mass liquidation of Wiener Doge sank the entire project into deep waters.
