FTC Issues Proposed Order Against Illusory Systems Over Allegations of Lax Security

According to The Federal Trade Commission, on 17 December 2025 it announced action against Illusory Systems, Inc., which does business as Nomad, for failing to implement adequate data security and contributing to a major breach in which hackers stole $186 million from consumers.

The complaint describes Nomad as a cross-chain or crypto bridge that relied on smart contracts and was warned about inadequate testing of code before deploying a vulnerability introduced in June 2022, after which virtually all assets in the bridge were transferred out and Nomad users lost more than $100 million.

The FTC alleges that Nomad marketed itself as a “security-first” platform but did not use secure coding practices, did not implement vulnerability reporting and incident response processes, and did not adopt widely known security technologies that could have mitigated losses. It also contends that after the vulnerability was exploited, Nomad lacked adequate incident response measures, delaying mitigation and amplifying consumer harm. Read more at The National Law Review.