Connecticut Bans State Crypto Use Amid Rising Scams in Switzerland

In response to growing concerns in the digital asset space, authorities in the United States and Switzerland have taken significant steps to address risks associated with cryptocurrency. In Connecticut, Governor Ned Lamont has signed a bill into law that prohibits state agencies from accepting or holding cryptocurrency, marking a clear policy shift away from public sector crypto engagement. This legislation, House Bill 7082, specifically restricts the state government’s use and custody of digital assets, prohibiting it from “accepting or requiring payment in the form of virtual currency” and from “purchasing, holding, investing in or establishing” any form of cryptocurrency reserve. Connecticut becomes one of the first US states to formally enshrine such restrictions, contrasting with federal initiatives and other states pushing forward with pro-crypto measures.

Meanwhile, Swiss regulators have directed Swissquote, the parent company of the crypto-enabled Yuh app, to address a surge in phishing and impersonation scams. The Swiss Financial Market Supervisory Authority (FINMA) issued the order after identifying a significant uptick in fake login portals and phishing attempts, particularly targeting users of the Yuh app. The Yuh platform, known for its accessibility to digital asset trading alongside traditional financial services, has become one of the most targeted crypto-enabled applications in Switzerland. The rise in external impersonation and spoof websites poses a serious threat to user trust and platform integrity, according to Swissquote CEO Marc Buerki.

Phishing and impersonation schemes have long been a challenge for fintech and crypto firms, but their sophistication and frequency have sharply increased in 2025. Artificial intelligence tools enable scammers to generate more convincing fraudulent content at scale, making it difficult for users to distinguish between legitimate and fraudulent websites. Many of the fake sites detected so far used social media promotions and spam emails to redirect users to phishing pages designed to look like official Swissquote and Yuh login portals.

Swissquote is not alone in facing this digital onslaught. Phishing, social engineering, and other scam vectors have accounted for significant crypto losses so far in 2025. The majority of these losses stem not from technical flaws in blockchain code but from users being tricked into giving up sensitive information. Address poisoning, fake support messages, and deepfake videos are also becoming increasingly popular with scammers. A particularly alarming case occurred in April, when a $330 million theft—one of the largest in crypto history—was carried out against an elderly investor through a targeted social engineering campaign. Even experienced professionals are not immune, as Mehdi Farooq, a venture partner at crypto investment firm Hypersphere, admitted that he had lost most of his life savings to a highly convincing phishing scam.

In its notice to Swissquote, FINMA emphasized that financial institutions operating in the digital asset space must go beyond securing internal systems—they must actively monitor and respond to external impersonation threats that could harm users and damage trust in the financial system. The regulator expects Swissquote to enhance its threat detection capabilities, improve user awareness programs, and cooperate with cybersecurity firms and international watchdogs to take down malicious websites more quickly. Failure to comply could result in penalties or further regulatory scrutiny.

Connecticut’s decision to move against digital asset integration comes at a time when a political rift is emerging around cryptocurrency policy, both at the federal and state levels. President Trump’s close ties to crypto industry figures and his broader push to make the US a hub for blockchain innovation have amplified these divisions. While Connecticut now stands firmly against state-level digital asset reserves, other states are moving in the opposite direction. Texas Governor Greg Abbott approved a bill in June to create a state-managed cryptocurrency reserve. Similarly, New Hampshire Governor Kelly Ayotte signed legislation in May to establish a state-held Bitcoin treasury, and similar proposals are being explored in states like Wyoming and Florida. This divergence of strategy among the states suggests that digital asset policy is becoming a new axis of partisan and regional disagreement.

Beyond banning crypto use in state transactions and reserves, HB 7082 also updates licensing rules for crypto-related businesses operating in Connecticut. The legislation includes additional compliance requirements for money transmission licensees dealing in digital assets, further tightening the regulatory framework in a state known for its cautious approach to fintech innovation. These changes could have implications for crypto exchanges and fintech startups seeking to operate in Connecticut, potentially leading to an outflow of crypto-related business to more permissive jurisdictions.

With the passage of HB 7082, Connecticut joins a minority of US states opting to explicitly restrict government engagement with digital assets. Whether this conservative posture becomes a model for other skeptical legislatures or a footnote in a larger wave of crypto adoption remains to be seen. The disconnect between state and federal strategies, and between states themselves, highlights the current disjointed regulatory landscape of the US crypto ecosystem. As the industry continues to mature—and as political influence shapes its future—Connecticut’s stance may be viewed either as prudent risk management or as a missed opportunity to participate in the evolving digital economy. With the bill set to take effect in October, Connecticut officials now face the task of enforcing this policy in an era where digital assets are increasingly embedded in commerce, finance, and even politics.