Connecticut Warns Residents About Offshore DeFi Risks
Connecticut Attorney General William Tong has issued an alert warning residents about unregulated offshore 'decentralized finance' (DeFi) cryptocurrency exchanges. The September 3, 2026 alert names GMX, Gains Network, dYdX, Aevo, Drift Protocol, Vertex Protocol, and Hyperliquid as platforms operating outside state and federal safeguards.
Tong described the platforms as 'built to lure investors in with promises of easy access and bigger returns,' adding that investors who run into trouble 'will be stranded with little to no recourse' while the platforms keep the profits. He called this 'exploitation.'
The alert also highlights how DeFi markets itself as open-access finance run by software and smart contracts, but many of the largest platforms are centralized corporate operations with opaque management, often registered in offshore jurisdictions such as Singapore and the Cayman Islands.