Connecticut officials issue crypto alert after $200,000 loss

Connecticut Attorney General William Tong and Banking Commissioner Jorge Perez have issued a consumer alert following the loss of $200,000 by a state resident. The individual was reportedly deceived by someone claiming to know them into depositing the funds into an unregulated decentralized finance (DeFi) cryptocurrency exchange.

While the specific exchange used in this incident was not identified, officials highlighted several offshore DeFi platforms that operate outside of U.S. regulatory protections, including GMX, Gains Network, dYdX, Aevo, Drift Protocol, Vertex Protocol, and Hyperliquid.

State officials warned that these platforms often utilize high-risk leverage—sometimes up to 250x—which can allow small market movements to instantly erase deposited collateral. Tong characterized such platforms as “exploitation” rather than innovation, noting that investors face significant security threats and have limited recourse for recovering funds once they are lost.