Connecticut AG Issues Crypto Alert After Investor Loses $200K

Connecticut Links $200,000 Loss to Unregulated DeFi Exchange

A Connecticut resident cannot recover $200,000 deposited into an unregulated decentralized finance (DeFi) cryptocurrency exchange after being deceived by someone claiming to know the person, state officials said Sept. 3. The Connecticut consumer alert did not identify the specific exchange involved or the person who solicited the transfer.

Connecticut Attorney General William Tong issued the alert alongside a statement from state Banking Commissioner Jorge Perez, citing financial losses, high-risk leverage, security threats, and limited avenues for recovering funds. Tong said platforms promising easier access and higher returns may leave investors with little to no recourse if something goes wrong. He noted:

“This isn’t innovation, it’s exploitation. Do research before handing over any money and know what protections are in place if things go wrong.”

The alert named GMX, Gains Network, dYdX, Aevo, Drift Protocol, Vertex Protocol, and Hyperliquid as offshore DeFi platforms that officials said operate beyond U.S. regulatory protections. It did not state that the Connecticut resident used any of those seven services, so the loss cannot be attributed to a named platform.