FTC Action Targets Crypto Bridge Security Failures
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ppOn December 17 2025 the Federal Trade Commission FTC issued a press release announcing that it is taking action against Illusory Systems Inc for failing to implement adequate data security measures leading to a major security breach in which hackers stole 186 million from consumersppIn its complaint the FTC alleged that Illusory doing business as Nomad designed operated and advertised a service that allows users to transfer messages and assets a type of platform commonly known as a crosschain bridge A crosschain bridge is also known as a crypto or blockchain bridge A crypto bridge enables the transfer of digital assets between two different blockchain networks It allows crypto owners to transfer tokens from one cryptocurrency network to another Trusted bridges are operated by a centralized authority and trustless bridges are decentralized and use smart contracts and validatorsppIn this case Nomad was a trustless bridge and relied on smart contracts In June of 2022 Nomad introduced new code for a smart contract that included a security vulnerability Threat actors exploited the vulnerability and virtually all assets in the bridgeworth approximately 186 millionwere transferred out Nomad users lost more than 100 million The complaint alleges that Nomad was warned about inadequate testing of the code but deployed it nonethelessppThe FTC alleges that Nomads failure to implement adequate security measures led to the breach It alleges that Nomad marketed itself as a securityfirst platform but failed toppThe FTC further alleges that after the vulnerability was exploited Nomad lacked adequate incident response measures delaying mitigation and amplifying consumer harmppThe proposed orderppThe proposed order is open for public comment for the next 30 days If you are a Nomad user and have not been reimbursed for the cryptocurrency loss you may be in luck if you are included in the proposed 375 million reimbursement requirement of the proposed orderppppYou are responsible for reading understanding and agreeing to the National Law Reviews NLRs and the National Law Forum LLCs Terms of Use and Privacy Policy before using the National Law Review website The National Law Review is a free to use nolog in database of legal and business articles The content and links on wwwNatLawReviewcom are intended for general information purposes only Any legal analysis legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice No attorneyclient or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms attorneys or other professionals or organizations who include content on the National Law Review website If you require legal or professional advice kindly contact an attorney or other suitable professional advisor ppSome states have laws and ethical rules regarding solicitation and advertisement practices by attorneys andor other professionals The National Law Review is not a law firm nor is wwwNatLawReviewcom intended to be a referral service for attorneys andor other professionals The NLR does not wish nor does it intend to solicit the business of anyone or to refer anyone to an attorney or other professional NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us ppUnder certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements Attorney Advertising Notice Prior results do not guarantee a similar outcome Statement in compliance with Texas Rules of Professional Conduct Unless otherwise noted attorneys are not certified by the Texas Board of Legal Specialization nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional CredentialsppThe National Law Review National Law Forum LLC 2070 Green Bay Rd Suite 178 Highland Park IL 60035 Telephone 708 3573317 or toll free 877 3573317 If you would ike to contact us via email please click hereppCopyright 2026 National Law Forum LLCp
ppOn December 17 2025 the Federal Trade Commission FTC issued a press release announcing that it is taking action against Illusory Systems Inc for failing to implement adequate data security measures leading to a major security breach in which hackers stole 186 million from consumersppIn its complaint the FTC alleged that Illusory doing business as Nomad designed operated and advertised a service that allows users to transfer messages and assets a type of platform commonly known as a crosschain bridge A crosschain bridge is also known as a crypto or blockchain bridge A crypto bridge enables the transfer of digital assets between two different blockchain networks It allows crypto owners to transfer tokens from one cryptocurrency network to another Trusted bridges are operated by a centralized authority and trustless bridges are decentralized and use smart contracts and validatorsppIn this case Nomad was a trustless bridge and relied on smart contracts In June of 2022 Nomad introduced new code for a smart contract that included a security vulnerability Threat actors exploited the vulnerability and virtually all assets in the bridgeworth approximately 186 millionwere transferred out Nomad users lost more than 100 million The complaint alleges that Nomad was warned about inadequate testing of the code but deployed it nonethelessppThe FTC alleges that Nomads failure to implement adequate security measures led to the breach It alleges that Nomad marketed itself as a securityfirst platform but failed toppThe FTC further alleges that after the vulnerability was exploited Nomad lacked adequate incident response measures delaying mitigation and amplifying consumer harmppThe proposed orderppThe proposed order is open for public comment for the next 30 days If you are a Nomad user and have not been reimbursed for the cryptocurrency loss you may be in luck if you are included in the proposed 375 million reimbursement requirement of the proposed orderppppYou are responsible for reading understanding and agreeing to the National Law Reviews NLRs and the National Law Forum LLCs Terms of Use and Privacy Policy before using the National Law Review website The National Law Review is a free to use nolog in database of legal and business articles The content and links on wwwNatLawReviewcom are intended for general information purposes only Any legal analysis legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice No attorneyclient or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms attorneys or other professionals or organizations who include content on the National Law Review website If you require legal or professional advice kindly contact an attorney or other suitable professional advisor ppSome states have laws and ethical rules regarding solicitation and advertisement practices by attorneys andor other professionals The National Law Review is not a law firm nor is wwwNatLawReviewcom intended to be a referral service for attorneys andor other professionals The NLR does not wish nor does it intend to solicit the business of anyone or to refer anyone to an attorney or other professional NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us ppUnder certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements Attorney Advertising Notice Prior results do not guarantee a similar outcome Statement in compliance with Texas Rules of Professional Conduct Unless otherwise noted attorneys are not certified by the Texas Board of Legal Specialization nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional CredentialsppThe National Law Review National Law Forum LLC 2070 Green Bay Rd Suite 178 Highland Park IL 60035 Telephone 708 3573317 or toll free 877 3573317 If you would ike to contact us via email please click hereppCopyright 2026 National Law Forum LLCp
