TL;DR
- Some Phantom users on iOS have lost access to their funds due to an unexpected restart of the app after an update.
- Phantom urged users to back up their recovery phrase in order to restore their wallet.
- The issue has raised concerns in the crypto community about the loss of funds and the company’s liability.
Phantom, the popular wallet provider for Solana, has alerted users of its iOS app about a technical issue that has caused some accounts to reset, logging users out and leaving them without access to their funds.
The company noted that only a small number of users have been affected, and although they have already released an update to prevent the problem from persisting, the inconvenience has raised concerns among cryptocurrency users.
The news was originally reported by the specialized portal The Block, highlighting the experiences of users who have lost access to their funds due to this situation.
Since Phantom operates as a non-custodial wallet, meaning it does not directly store user keys, the only way to recover funds is through the recovery phrase, also known as the “seed phrase“.
We're aware that a small number of iOS users are experiencing app resets. If you happen to be among them, you can restore your wallet using your recovery phrase.
We've pushed a new iOS app update to prevent this from affecting any additional users.
Please make sure you always…
— Phantom (@phantom) November 13, 2024
This phrase, generated at the time of wallet creation, must be stored in a safe place, as it acts as a backup to recover access in case of loss or damage to the device. Phantom took advantage of the situation to remind all users of the importance of safeguarding this phrase, which is the only means of restoration in situations like this.
However, the lack of backing for this phrase has caused significant losses for some users. On social media, multiple people shared their experiences, including one user who claimed to have lost up to a million dollars worth of digital assets.
Another user expressed frustration after losing access to 100 wallets, while others said they had lost funds intended for trading and investment activities. The situation has opened up a debate about the responsibility and risks that users assume when managing non-custodial cryptocurrency wallets.
Concern in the Phantom community
This incident is the second technical issue that Phantom has faced in a few weeks. In late October, some users reported errors in their account balances, causing confusion among investors.
These issues have raised concerns among users about the app’s reliability and digital asset management, and have questioned whether the company should offer any form of compensation for those who have lost funds.
From a user perspective, the issue reflects the need for additional precautionary measures when handling digital wallets, especially in apps like Phantom that cannot directly intervene to recover funds.
Some community members have suggested that Phantom should review its update policies and ensure that users are fully informed before each change to the app, given that the update was automatic and without warnings about the potential risks.
For now, Phantom has maintained its stance that users should take responsibility for backing up their recovery phrases. They have also reiterated their commitment to prevent this situation from happening again and have enabled a support team to handle any further issues, which can be contacted through the app settings.
Despite the company’s efforts, the incident makes clear the importance of safe practices when storing digital assets in non-custodial wallets.
