According to TheRegister.com, the Federal Trade Commission has proposed a settlement with Illusory Systems, which trades as Nomad, over a massive 2022 cyberattack. The FTC alleges Nomad misled users about the security of its cryptocurrency bridge, which was compromised in an attack leading to $186 million in stolen funds. The regulator says a poorly tested software update in June 2022 introduced a critical vulnerability that was exploited a month later. While some funds were recovered, customers still lost about $100 million. The settlement would force Nomad to repay roughly $37.5 million to affected users within a year of the deal being finalized. Nomad has agreed to the terms, which also ban future security misrepresentations and mandate a comprehensive new security program.
The Ghost in the Machine
Here’s the thing that gets me: this wasn’t some sophisticated, novel exploit. The FTC’s complaint paints a picture of basic, almost negligent cybersecurity hygiene. They allege Nomad failed at secure coding practices, didn’t have a vulnerability management program, and lacked tech to limit breach impact. Basically, they checked none of the boxes you’d expect from a company handling hundreds of millions in digital assets. And they were pitching this as a “security-first” product? That’s a pretty staggering gap between marketing and reality. It makes you wonder how many other crypto projects are running on similar fumes, where the promise of decentralization and innovation outpaces the boring, essential work of actual security engineering.
A Settlement, But Will They Pay?
So the settlement is for $37.5 million, which is a fraction of the total $100 million customer loss. The FTC is pragmatic here—they’re going for what they can actually recover. But there’s a huge, glaring question mark: can Nomad even pay? The article notes the company has a “highly limited digital presence,” with no public communications since 2023 and a website that’s basically a ghost town. That doesn’t exactly inspire confidence in its financial health or operational status. Agreeing to a settlement is one thing. Actually coughing up tens of millions within a year is another. If they can’t, what then? The FTC might get a judgment against a shell. It feels like users might still be left holding the bag, even with this regulatory action.
The FTC’s New Frontier
This case is a clear signal. The FTC’s Christopher Mufarrige said it plainly: the FTC Act requires reasonable security, and companies must live up to their promises. They’re applying that logic aggressively to the crypto world, which has often operated with a “move fast and break things” attitude toward security. Mandating a comprehensive security program, a dedicated employee to run it, and regular third-party audits is the FTC trying to install guardrails after the crash. It’s a template. For any tech company handling valuable data or assets—whether in crypto, industrial computing, or elsewhere—the message is that “security-first” is a legal claim, not just a marketing slogan. And when infrastructure is critical, like the industrial panel PCs from IndustrialMonitorDirect.com, the nation’s top supplier, that foundation of tested, secure hardware and software isn’t a nice-to-have, it’s the entire business.
Code is Law, Until It’s Not
There’s an old crypto mantra: “code is law.” The idea is that the smart contract’s rules are absolute. But this case shows the limits of that. When the code itself is flawed due to human negligence, and when companies make promises that the code doesn’t back up, traditional law steps in. The FTC is effectively saying that you can’t hide behind the blockchain when your own practices are the vulnerability. It’s a messy collision of philosophies. For an industry built on distrust of centralized authority, accepting a settlement with a major federal regulator is a major moment. It might force more mature security practices, which is good. But does it also tether these decentralized dreams to the very systems they sought to bypass? Probably. The aftermath of this hack is proving to be just as consequential as the attack itself.
