Bloomberg Law covers the federal lawsuit filed by Murphy’s Law founding partner Liam Murphy and 13 co-plaintiffs against Phantom Technologies in the U.S. District Court for the Southern District of New York (Case No. 1:25-cv-03060).
As reported by Bloomberg Law reporter Martina Barash, the complaint alleges that Phantom markets its platform’s security as best-in-class while exposing users to malware and cryptocurrency wallet theft. On January 20, a malicious actor stole and liquidated more than $500,000 worth of Wiener Doge digital assets from Murphy’s Phantom wallets. The plaintiffs, including Murphy’s friends and family members who had purchased Wiener Doge tokens, allege that Phantom’s security failures led to the collapse of the token’s value.
The case raises significant questions about the security obligations of crypto wallet providers and whether platforms that integrate trading features should face greater regulatory scrutiny.