Hyperliquid pushes CFTC oversight toward deployers, not blockchain
As U.S. scrutiny of crypto market structure continues, Hyperliquid founder Jeff Yan says regulation should apply to firms that build and run financial products on the network rather than to the blockchain itself. The approach could open a path for regulated operators to use Hyperliquid technology in the U.S. while the platform's own perpetual futures market remains unavailable to domestic customers.
Highlights
- Bloomberg reports Yan advocates that companies operating trading markets on Hyperliquid, not the blockchain itself, should bear regulatory responsibility.
- Payward, Kraken's parent company, plans to offer U.S. investors derivatives using Hyperliquid's technology via a CFTC-regulated exchange while Hyperliquid's perps market remains closed to U.S. customers.
- Yan's stance is timely as President Donald Trump claimed in August that the CFTC was working to bring Hyperliquid under U.S. federal regulations.
Regulatory model for Hyperliquid operators
As reported by CoinDesk, citing Bloomberg, Yan said companies operating trading markets on Hyperliquid should bear responsibility for meeting regulatory requirements, comparing the blockchain's role to internet infrastructure used by financial firms.He said oversight should sit at the level where controls exist, arguing that deployers, not the underlying network, are the parties that exercise those controls. Yan told Bloomberg this would let financial businesses build trading operations on Hyperliquid without requiring the blockchain itself to register as a regulated exchange.
Hyperliquid is best known for its perpetual futures trading platform, but that market remains closed to U.S. customers.
U.S. market implications for crypto derivatives
Yan said the technology is not intended to displace traditional market operators and could instead support firms already running markets in more conventional settings.That stance gains relevance as Payward, Kraken's parent company, plans to offer U.S. investors derivatives using Hyperliquid's technology through a regulated exchange. For Hyperliquid, that could mean adding a Commodity Futures Trading Commission regulated operator even as its own perps market stays unavailable in the country.
His comments also come after President Donald Trump said in August that the CFTC was working to bring Hyperliquid into the U.S. under federal regulations.
In our earlier article on U.S. exchanges moving to 23/5 trading, we covered plans by major venues to extend equities trading to nearly round-the-clock hours to meet global demand. We also highlighted the potential downsides of overnight sessions, including thinner liquidity, wider spreads, and greater market-surveillance and manipulation risks.
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