Phantom Wallet Faces Backlash After iOS App Update Locks Users Out of Wallets

Phantom, the popular Solana-based DeFi wallet provider, has issued an urgent update for iOS users following complaints that the latest app version reset wallets, leaving users locked out unless they had their recovery phrases on hand.

On November 14, Phantom acknowledged the issue on X (formerly Twitter), stating, “We’re aware that a small number of iOS users are experiencing app resets.” The company advised affected users to restore their wallets using their recovery phrases, which are essential for regaining access to the wallets. Phantom also confirmed that it had released a new update to fix the issue and prevent it from affecting other users.

Since the update was rolled out, several users have taken to social media to share their frustrations, claiming that they had been logged out of their wallets, lost access to their funds, or saw their balances wiped out entirely. Some users reported that after downloading the latest version of Phantom on iOS, their wallets were automatically reset, effectively locking them out without the recovery phrase.

“I lost my 983 SOL, please send it back,” one user wrote, while another lamented, “I just lost my wallet holding $600K, this is my life’s worth/savings, when am I getting my reimbursements?” Others expressed confusion about the app resetting itself, asking, “Why did my app reset overnight and remove all my wallets?”

A Cautionary Tale: Protecting Recovery Phrases

Many crypto users, especially those new to the space, were caught off guard by the issue. Crypto trader Ace, with 42,000 followers on X, warned users not to update their Phantom wallets without first securing their seed phrases, the key to recovering funds. “I don’t know why they set such a horrible update, but it wipes your wallet on iOS,” Ace wrote in a post.

Several other users echoed similar concerns, with one writing, “Phantom deleting people’s wallets with the most recent update, lots of tokens are going to get burned from folks that forgot to back up keys.”

As a non-custodial wallet, Phantom does not have access to users’ private keys or seed phrases, meaning the company cannot assist users who have lost their recovery phrase or private keys. The wallet provider has urged users to securely store their seed phrases in a safe place to prevent such issues from resulting in irreversible loss of funds.

For those who are locked out, Phantom has directed users to contact their support team for further assistance. However, the company has warned that recovery is only possible for those who have their recovery phrases, as they do not have the capability to access or restore wallets directly.

Phantom’s Troubles: A History of Issues

This recent incident is not the first time Phantom has faced technical difficulties. In October 2023, the wallet experienced downtime, during which some users reported seeing inaccurate account balances. At the time, Phantom acknowledged the issue and worked to resolve the service disruption, assuring users that the matter would be rectified within hours.

Despite these challenges, Phantom has remained one of the most popular wallets in the Solana ecosystem, offering users a decentralized way to manage their assets without relying on a central authority.

This incident serves as a cautionary reminder to all crypto wallet users about the importance of securing their recovery phrases. As Phantom and other non-custodial wallet providers do not store users’ private information, losing access to recovery phrases can lead to permanent loss of funds.

For now, Phantom has apologized for the inconvenience and assured users that the issue has been addressed with a new update. The company has committed to preventing similar problems in the future, though it remains clear that users must take personal responsibility for backing up their recovery phrases to avoid potential losses.