Nomad hack: Crypto advocacy groups slam FTC ‘kill switch’ proposal

Core Viewpoint - The crypto industry is pushing back against the Federal Trade Commission's (FTC) complaint regarding the lack of a "kill switch" in the Nomad crypto bridge software, which was hacked for nearly $200 million in 2022 [1][2][3] Group 1: FTC Complaint and Industry Response - The FTC alleged that Illusory Systems, the parent company of Nomad, failed to take reasonable steps to secure its software, raising concerns about the definition of "reasonable and appropriate" [2][3] - The FTC's complaint highlighted the absence of "circuit breakers" or a "kill switch" that could halt the Nomad Token Bridge during suspicious transactions, which the crypto industry argues is not an industry standard and may increase vulnerability to hackers [3][4] Group 2: Nomad Hack Details - Nomad, which aimed to provide "security-first interoperability," raised $22 million at a $225 million valuation but was hacked four months later, resulting in approximately $186 million stolen due to "inadequately tested code" [5] - The hack involved around 300 hackers exploiting a bug, and while Nomad recovered about $37 million through ethical hackers, the relaunched bridge has struggled, holding only $1 million in user deposits as of the latest data [5]