Users of the popular digital asset wallet Phantom found themselves in a precarious situation this week following a botched update that inadvertently reset their iOS wallet applications. This unexpected glitch left users locked out of their wallets, forcing the developers to hastily release an emergency update to rectify the issue.
Distraught users flooded social media platforms to express their frustration and fear, revealing that the latest iOS update for the Phantom wallet had effectively wiped out their digital assets. To regain access to their wallets, users were required to utilize their recovery phrases. However, those who hadn’t securely backed up their recovery phrases found themselves unable to regain access to their wallets.
Among the affected users, some shared stories of losing hundreds of thousands of dollars, their hard-earned life savings, while others desperately sought help from the developers in recovering their assets. Yet, Phantom, being a non-custodial wallet, does not store user’s seed phrases, leaving many in a state of helplessness.
The developers eventually acknowledged the issue, stating that a “small number” of iOS users were experiencing app resets. They urged the affected users to use their recovery phrases to restore their wallets and announced the release of an emergency update to prevent more users from falling victim to the same glitch. “We sincerely apologize for any inconvenience this might have caused, and we’re committed to making sure this won’t happen again,” stated Phantom in response to the crisis.
This incident came on the heels of another disruption that hit Phantom less than a month ago, causing hours of downtime. The earlier incident was triggered by an airdrop that conducted a stress test on the Phantom wallet, which unfortunately failed to handle the increased traffic.
Such outages and glitches in the digital asset realm are particularly distressing given the recurrent attacks where millions of dollars are often lost. In a recent incident, DeFi platform DeltaPrime fell victim to an attacker who made off with $4.8 million worth of Arbitrum and Avalanche tokens. This was the second attack on the platform in as many months, with the September heist resulting in the loss of $6 million.
In a report released last month, cybersecurity firm CertiK disclosed that hackers stole a colossal $753 million from digital asset holders in the third quarter of this year alone. The total stolen this year has now reached a shocking $2 billion, setting this year on track to surpass last year’s losses, despite a report by Chainalysis indicating a 20% decline in ‘crypto’ crime this year.
Nonetheless, regulators are improving their strategies in clamping down on these cybercriminals. This week, Indian police apprehended a suspect believed to be behind the $235 million heist of leading local exchange WazirX, marking the second-largest exploit in Q3.
In the wake of these events, it becomes increasingly clear that while digital assets offer unparalleled potential, they also present unique challenges that need to be addressed to ensure their stability and security for all users.
