Phantom Wallet Faces Lawsuit After $500K Worth of Memecoins Stolen

• Phantom Wallet is facing a lawsuit from Attorney Thomas Liam Murphy over allegations of negligence and fraud.
• Hackers stole $500K in Wiener Doge tokens through a security flaw in Phantom’s browser wallet.
• The lawsuit claims Phantom stored users’ private keys in unencrypted browser memory, leaving them vulnerable to attacks.

Crypto wallet provider Phantom is facing legal trouble after a group of investors, led by attorney Thomas Liam Murphy, filed a lawsuit accusing the company of serious security failures. The complaint, filed on April 14 in New York, claims a flaw in Phantom’s browser extension led hackers to steal over $500,000 worth of Wiener Doge (WIENER), a Solana-based memecoin created by Murphy himself.

According to the lawsuit, a hacker gained access to Murphy’s private key by pulling it from the wallet’s unencrypted browser memory—a vulnerability Phantom allegedly knew about but never fixed or warned users about. Once inside, the attacker bypassed two-factor authentication and drained three Phantom wallets, using the built-in “Swapper” feature to convert the stolen memecoins into Solana (SOL) through OKX’s smart contract system.

The impact was massive. Wiener Doge, which once boasted a $1 million market cap, crashed in value after the theft and is now worth less than a penny per token. Thirteen other investors—friends and family of Murphy—joined the lawsuit, saying they lost their money too.

OKX Integration Alleged to Have Enabled Quick Swap of Stolen Memecoins

What made the attack worse, according to the complaint, was the role of cryptocurrency exchange OKX. Phantom had quietly integrated OKX’s smart contract routing into its Swapper tool in late 2024. This allowed the hacker to instantly swap the stolen memecoins for SOL using OKX’s pricing and transaction services.

The lawsuit argues that without OKX’s system, the hacker wouldn’t have been able to quickly liquidate the funds. It also points out that OKX had previously admitted to processing $5 billion in illegal transactions as part of a federal money laundering case.

Now, Murphy and 13 other plaintiffs — who also lost money in the crash — are seeking $3.1 million in damages. Phantom has yet to respond publicly.

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