Phantom, a crypto wallet provider, has issued an emergency update for iOS users following reports of app resets that locked users out of their wallets.

Some users reported significant financial losses due to the app reset, with one individual claiming a loss of $600,000 and others reporting losses ranging from $10,000 to $100,000.

The issue emerged earlier in the week, alarming users who were concerned about potential fund losses from inaccessible accounts.

In response to the crisis, Phantom urged users to back up their recovery phrases and issued an apology, committing to preventing similar issues in the future.

The company launched an updated version of its iOS app and emphasized the importance of securely storing seed phrases.

In light of ongoing issues with wallet recovery, the DeRec Alliance has proposed a decentralized approach to wallet recovery, aiming to create open standards that protect users' private information.

This incident is not the first for Phantom; it follows a previous issue in October 2024, when users experienced incorrect balance displays due to a temporary service disruption.

Despite these challenges, Solana, the blockchain that Phantom operates on, has shown strong activity, even exceeding Ethereum in daily network fee generation.

As a non-custodial wallet, Phantom does not store users' seed phrases, meaning it cannot assist those who have lost their backup information.

The recent app reset incident followed a previous downtime during the Grass token airdrop in late October 2024, where a surge in activity caused nearly three hours of service interruption.

The article concludes with a disclaimer about the high-risk nature of cryptocurrency investments.

The loss of recovery phrases has long been a problem for less tech-savvy crypto users, prompting the development of recovery services to assist in managing these phrases effectively.