Connecticut DeFi warning follows resident’s $200K loss

Connecticut has issued a warning about unregulated offshore DeFi exchanges after a resident lost access to $200,000 deposited following a deceptive solicitation. Summary A Connecticut resident cannot recover $200,000 sent to an unnamed unregulated DeFi exchange. State officials listed seven offshore platforms but did not connect any of them to the loss. Some offshore exchanges offer leverage as high as 250x and synthetic exposure to U.S. stocks. The CFTC advises Americans to use registered exchanges when trading crypto perpetual contracts. The Connecticut Attorney General’s Office said on Sept. 3 that a person claiming to know the resident persuaded them to deposit $200,000 into an unregulated decentralized finance exchange. The office did not identify the person, the platform used, or when the transfer occurred. Unable to recover the money, the resident became the main example in a consumer alert issued by Attorney General William Tong and state Banking Commissioner Jorge Perez. Officials warned that users of offshore platforms may have few practical options for recovering funds after fraud, a security breach, a platform failure, or a dispute. Tong said platforms may attract custo...