Notice2025-23407
Illusory Systems, Inc.; Analysis of Proposed Consent Order To Aid Public Comment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 19, 2025
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair or deceptive acts or practices. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order--embodied in the consent agreement--that would settle these allegations.
Full Text
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<title>Federal Register, Volume 90 Issue 242 (Friday, December 19, 2025)</title>
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[Federal Register Volume 90, Number 242 (Friday, December 19, 2025)]
[Notices]
[Pages 59521-59522]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23407]
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FEDERAL TRADE COMMISSION
[File No. 232 3016]
Illusory Systems, Inc.; Analysis of Proposed Consent Order To Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the complaint and the
terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before January 20, 2026.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write ``Illusory
Systems; File No. 232 3016'' on your comment and file your comment
online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the instructions on
the web-based form. If you prefer to file your comment on paper, please
mail your comment to: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Ave. NW, Mail Stop H-144 (Annex B),
Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: M. Hasan Aijaz (214-979-9386),
Attorney, Division of Privacy and Identity Protection, Bureau of
Consumer Protection, Federal Trade Commission, 400 7th St. SW,
Washington, DC 20024.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis to Aid Public Comment describes the terms of the consent
agreement and the allegations in the complaint. An electronic copy of
the full text of the consent agreement package can be obtained at
<a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before January 20,
2026. Write ``Illusory Systems; File No. 232 3016'' on your comment.
Your comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
We encourage you to submit comments through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. Postal mail addressed to the Commission
will be subject to delay because of heightened security screening. If
you prefer to file your comment on paper, write ``Illusory Systems;
File No. 232 3016'' on your comment and on the envelope, and send it
via overnight service to: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex B),
Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--
[[Page 59522]]
including competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website--as legally
required by FTC Rule 4.9(b)--we cannot redact or remove your comment
from that website, unless you submit a confidentiality request that
meets the requirements for such treatment under FTC Rule 4.9(c), and
the General Counsel grants that request.
Visit the FTC website at <a href="https://www.ftc.gov">https://www.ftc.gov</a> to read this document
and the news release describing the proposed settlement. The FTC Act
and other laws the Commission administers permit the collection of
public comments to consider and use in this proceeding, as appropriate.
The Commission will consider all timely and responsive public comments
it receives on or before January 20, 2026. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a consent order from
Illusory Systems, Inc., doing business as Nomad (``Respondent''). The
proposed consent order (``proposed order'') has been placed on the
public record for 30 days for receipt of comments from interested
persons. Comments received during this period will become part of the
public record. After 30 days, the Commission will again review the
agreement and the comments received, then decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
This matter involves Respondent's software development practices.
Respondent operated an online service, a token bridge, through which
consumers could transfer assets to peers.
The proposed complaint alleges that Respondent claimed to keep
users' assets secure, but in fact failed to implement reasonably secure
software development practices. For example, the proposed complaint
alleges that Respondent failed to: conduct adequate unit tests,
implement a process for receiving and addressing third-party security
vulnerability reports, have a Written Information Security Plan, and
implement widely-known technologies that would mitigate critical loss
of user funds. The proposed complaint alleges that as a result of
Respondent's failures, in August 2022, hackers exploited a significant
vulnerability in the token bridge and took virtually all of its
assets--worth approximately $186 million. Even after Respondent
recovered some assets and returned them to users, users of the bridge
were left with losses that exceeded $100 million worth of assets.
The proposed complaint alleges that Respondent violated section
5(a) of the FTC Act by: (1) failing to employ reasonable and
appropriate software development practices; and (2) misrepresenting
that it implemented secure software development practices. The proposed
order contains provisions designed to prevent Respondent from engaging
in the same or similar acts or practices in the future.
Part I prohibits Respondent from misrepresenting (1) the extent to
which Respondent implements reasonable and appropriate software
development practices; and (2) the extent to which it secures
consumers' financial assets.
Part II requires Respondent to establish and implement, and
thereafter maintain, a comprehensive information security program
(``Security Program'') that protects the consumers' financial assets.
Part III requires Respondent to obtain initial and biennial data
security assessments for ten years. Part IV requires Respondent to
disclose all material facts to the assessor and prohibits Respondent
from misrepresenting any fact material to the assessment required by
Part III.
Part V requires Respondent to submit an annual certification from a
senior corporate manager (or senior officer responsible for its
Security Program) that Respondent has implemented the requirements of
the Order and is not aware of any material noncompliance that has not
been corrected or disclosed to the Commission. Part VI requires
Respondent to return recovered assets to users and to submit a report
at the conclusion of the program summarizing its compliance.
Part VII requires Respondent to submit an acknowledgement of
receipt of the order, including all officers or directors and employees
having managerial responsibilities for conduct related to the subject
matter of the order, and to obtain acknowledgements from each
individual or entity to which Respondent has delivered a copy of the
order.
Part VIII requires Respondent to file compliance reports with the
Commission and to notify the Commission of bankruptcy filings or
changes in corporate structure that might affect compliance
obligations. Part IX contains recordkeeping requirements for accounting
records, personnel records, consumer correspondence, advertising and
marketing materials, and all records necessary to demonstrate
compliance with the order. Part X contains other requirements related
to the Commission's monitoring of Respondent's order compliance.
Part XI provides the effective dates of the order, including that,
with exceptions, the order will terminate in 10 years.
The purpose of this analysis is to facilitate public comment on the
order, and it is not intended to constitute an official interpretation
of the complaint or order, or to modify the order's terms in any way.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2025-23407 Filed 12-18-25; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on December 19, 2025.
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