FTC Proposes Settlement with Nomad Crypto Bridge Operator Over Security Breach

According to ChainCatcher, the U.S. Federal Trade Commission (FTC) announced on Tuesday a proposed settlement with Illusory Systems, the operator of the Nomad crypto bridge, following a hacking incident that resulted in the theft of nearly all platform funds. The FTC's complaint states that Illusory Systems introduced a critical vulnerability during a code update in June 2022, which hackers exploited starting August 1, leading to the theft of approximately $186 million in Ethereum, USDC, DAI, and WBTC assets. Users suffered losses exceeding $100 million. The FTC accuses Nomad of failing to adequately test its code, maintain clear vulnerability reporting and incident response processes, and deploy basic security measures to limit user losses, despite claiming to be a "security-first" platform. Under the proposed settlement, Illusory Systems will be prohibited from misrepresenting its security practices, required to implement a formal information security program, undergo independent security assessments every two years, and return any recovered funds to affected users that have not yet been reimbursed. Following the hack, Nomad managed to recover only $22 million of the stolen funds.