Consumers Affected
1
Attorney General William Tong issued a consumer alert warning Connecticut residents about unregulated, offshore decentralized finance (DeFi) cryptocurrency exchanges, naming GMX, Gains Network, dYdX, Aevo, Drift Protocol, Vertex Protocol, and Hyperliquid. The alert highlights risks including bypassing U.S. law via VPNs, predatory leverage up to 250x, misleading synthetic asset products, and lack of KYC protections. No enforcement action or penalty was imposed; at least one Connecticut consumer reportedly lost $200,000 deposited with an unregulated DeFi exchange.
No enforcement remedies were imposed. The Attorney General issued a consumer alert advising consumers to verify a platform's U.S. regulatory registration before sending money, keep records of all transactions and communications, and report suspected scams to the Office of the Attorney General.
In-house legal teams engaging crypto, fintech, or digital asset service providers should review vendor onboarding and vendor management agreements to require representations that all counterparties are properly registered and regulated with applicable U.S. authorities (state banking/securities regulators, FinCEN, SEC/CFTC as applicable). Contracts should include KYC/AML and sanctions compliance clauses, warranties that the vendor does not operate through unregistered offshore entities or facilitate evasion of U.S. jurisdictional restrictions (e.g., via VPNs), and disclosure provisions regarding investor protections and the irreversibility of digital asset transactions. Treasury and investment policies permitting any use of digital asset platforms should be updated to prohibit transacting on unregulated DeFi exchanges, and customer-facing terms should include clear risk disclosures. No specific statutes were cited in this alert, but Connecticut's digital asset marketplace rules, including cryptocurrency ATM safeguards, signal heightened state scrutiny of crypto vendor relationships.
Entity
Hyperliquid
Industry
Financial Services"Attorney General William Tong today issued a comprehensive consumer alert warning Connecticut residents about the significant financial and security risks associated with unregulated, offshore "decentralized finance" (DeFi) cryptocurrency exchanges."
"09/03/2026"
"including GMX, Gains Network, dYdX, Aevo, Drift Protocol, Vertex Protocol, and Hyperliquid"
"bypass critical consumer protections and expose retail investors to substantial financial losses, predatory leverage, and serious security risks"
"The Office of the Attorney General is aware of at least one Connecticut consumer who was deceived into depositing $200,000 into an unregulated DeFi cryptocurrency exchange"
"approximately 22.6% of traffic to Hyperliquid, the world's largest perpetual contracts exchange, originates from the U.S."
Connecticut Attorney General William Tong announced a civil investigative demand into MediaLab.AI Inc., owner of the Kik Messenger app, over lax age assurance practices, content moderation, and child safety failures that advocates have dubbed a "predator's paradise." The action follows a July 2025 notice of violation under the Connecticut Data Privacy Act for privacy notice deficiencies and processing sensitive data — including health, biometric, and precise geolocation data — without proper consent, which the company has only partially addressed. The new investigation seeks records related to practices that may constitute unfair or deceptive acts or practices under the CTDPA and the Connecticut Unfair Trade Practices Act. No fine has been imposed to date.
$2.0M
Attorney General Tong and a coalition of four other states and the FTC sued Zillow and Redfin after Zillow paid Redfin $100 million to shut down its multifamily rental advertising business and transfer clients to Zillow. The settlement requires the companies to restore competition, with Redfin rebuilding its apartment advertising business, and pay $2 million to the coalition.
Attorney General William Tong sent a letter to the Connecticut Insurance Department urging rejection of double-digit rate increases sought by Anthem, ConnectiCare, and UnitedHealthcare for individual and small group health insurance plans covering about 220,000 people. The letter argues the rates exceed inflationary measures and criticizes the carriers for failing to control costs and for poor claims system management, particularly ConnectiCare's transition to Molina Healthcare.
$275K
Connecticut Attorney General William Tong announced a $275,000 settlement with TaxAct, an online tax preparation company, over allegations that between January 2018 and December 2022, TaxAct improperly disclosed detailed customer financial information to Meta and Google through third-party tracking technologies without notifying taxpayers. The settlement requires TaxAct to pay $275,000 and implement new third-party tracking compliance measures, including a review committee, written policies, a tag monitoring system, and two independent third-party audits.
$4.0M
Connecticut Attorney General William Tong and the Federal Trade Commission announced a $4 million settlement with Manchester City Nissan (Chase Nissan LLC) resolving allegations that the dealership double-charged for 'certified pre-owned' vehicles and collected unauthorized junk fees. The settlement requires payment for consumer redress, prohibits misrepresentations, mandates clear disclosure of the maximum total price, and requires express informed consent for all charges.
Attorney General Tong and a coalition of 21 attorneys general and Pennsylvania filed lawsuits against the U.S. Department of Transportation, FMCSA, and DHS to block demands for the personal information of 17 million CDL drivers. The lawsuits allege violations of federal privacy laws and the Administrative Procedure Act, and seek an emergency order to prevent the data transfer.