Veritas Protocol: Phantom Cryptocurrency Wallet Faces Allegations Of Hacking Amid Server Outage Claims

On February 12, 2025, Phantom, a well-known cryptocurrency wallet, reported a server outage that quickly escalated into allegations of a significant security breach. KookCapitalLLC, a crypto analysis firm, claimed that the outage was a cover for a hack that compromised user funds, leading to a sharp decline in the value of Phantom's associated token, PHM.

Key Takeaways

Phantom initially reported a server outage, later claimed to be a hack.
User funds are reportedly at risk due to the security breach.
PHM token value dropped by 12.5% shortly after the hack announcement.
Trading volume for PHM surged by 200% during the incident.

Timeline Of Events

14:35 UTC: Phantom announces a server outage.
14:45 UTC: KookCapitalLLC tweets about the alleged hack, stating user funds are not safe.
14:45-15:00 UTC: PHM token drops from $1.60 to $1.40, a 12.5% decline.
14:45-15:45 UTC: Over 10,000 transactions recorded for PHM, indicating panic selling.

Market Reaction

The immediate aftermath of the alleged hack saw a significant sell-off in PHM, reflecting a loss of confidence in Phantom's security measures. The trading volume for PHM increased dramatically, indicating a rush to liquidate positions. Key metrics include:

PHM Trading Volume: Increased from an average of 25 million to 75 million tokens within an hour.
Price Drop: PHM/USDT fell by 15% from $1.60 to $1.36.
Increased Volatility: The Relative Strength Index (RSI) dropped from 60 to 30, indicating oversold conditions.

Broader Implications

The hack not only affected PHM but also had ripple effects on other tokens associated with wallet security. For instance:

Ledger (LDO): Dropped by 3% from $2.30 to $2.23.
AI Tokens: Minor fluctuations were observed, with SingularityNET (AGIX) and Fetch.AI (FET) experiencing slight declines.

Conclusion

The Phantom incident highlights the vulnerabilities in cryptocurrency security and the rapid market reactions to such breaches. As the situation develops, users are advised to remain vigilant and consider moving their funds to safer wallets. The full extent of the damage and the response from Phantom remains to be seen, but the event serves as a stark reminder of the risks associated with digital assets.