Important Step Forward: FTC Orders Illusory Systems to Compensate Nomad Bridge Hack Victims

The U.S. Federal Trade Commission (FTC) has announced a binding settlement with Illusory Systems Inc., the company behind the Nomad Bridge project. This decision stems from the 2022 cyberattack—a major security breach caused by a critical vulnerability introduced into the system in June 2022.

Scope of Damage and Actual Cause

The Nomad Bridge attack resulted in significant losses exceeding $100 million. The root cause was not due to a sophisticated hack but simply a programming error discovered too late. The code update in June 2022 contained a flaw that malicious actors later exploited to attack multiple users.

Penalties and Commitments

Under the terms of the agreement, Illusory Systems faces substantial restrictions. The company is prohibited from issuing any misleading information regarding the system’s protection and security capabilities. Additionally, they must develop a comprehensive information security management mechanism and accept independent security audits every two years.

Most importantly, the company is responsible for recovering and reimbursing the full amount lost by users affected by this hack. This is a meaningful step toward protecting the rights of the crypto community from security incidents caused by poor management.

Next Steps: Public Response

Currently, the settlement is in a 30-day public consultation period. This allows the community of users and stakeholders to provide comments or objections before the final decision is implemented.