Key Highlights
- Hyperliquid Policy Center has petitioned SEC and CFTC to establish consistent classification standards for perpetual contracts
- The advocacy organization contends products should be categorized based on economic mechanics rather than underlying assets
- HIP-3 trading platforms operated by Hyperliquid have recorded more than $480 billion in volume across 10 months with $4 billion in outstanding positions
- Legacy trading venues CME and ICE have voiced opposition to Hyperliquid, culminating in CME’s lawsuit against the CFTC in June regarding perpetual futures approval
- President Trump announced CFTC efforts to facilitate Hyperliquid’s compliant U.S. market entry
The Hyperliquid Policy Center has submitted formal comments to federal regulators requesting development of a harmonized regulatory structure for perpetual contracts. The organization advocates for ending disparate treatment of identical financial instruments based solely on jurisdictional oversight.
Unlike conventional futures contracts, perpetuals operate without expiration dates. These instruments employ periodic funding rate mechanisms to maintain price alignment with their reference assets. This unique design places them in regulatory limbo between futures and swaps under existing United States financial law.
According to the Hyperliquid Policy Center, regulatory classification ought to depend on contractual economic functionality rather than the referenced underlying asset. The organization maintains that whether a perpetual tracks cryptocurrency, commodities, or equities should not alter its legal categorization.
The advocacy group additionally proposed that cash-settled equity perpetuals exhibiting futures-like attributes could be designated as security futures. This product category already falls under joint jurisdiction of both the SEC and CFTC.
Unclear Rules Generate Litigation Exposure
The HPC warns that absent definitive classification standards, jurisdictional conflicts over product listing authority between regulators could escalate to litigation. A harmonized approach would enable trading venues to differentiate based on market depth and execution performance rather than regulatory uncertainty.
This legal exposure has already materialized. CME filed suit against the CFTC following the agency’s authorization of inaugural U.S.-listed perpetual contracts for Coinbase and Kalshi in June. Both CME and ICE have expressed concerns regarding potential market manipulation through platforms like Hyperliquid.
The CFTC granted approval for these pioneering perpetual contracts in May. Subsequently, both regulatory agencies have solicited public input regarding application of existing derivatives regulations to emerging product types.
The Hyperliquid Policy Center additionally requested regulatory authorities grant exchanges operational discretion in product listing determinations. The organization suggested initial regulatory clarity could emerge through interpretive guidance or staff-level actions, with comprehensive rulemaking to follow subsequently.
Platform Expansion Captures Presidential Focus
Hyperliquid processed approximately $3 trillion in notional trading volume throughout 2025 and has exceeded $1.5 trillion in the current year. The platform’s offerings encompass bitcoin, ether, petroleum, precious metals, foreign exchange, equity indices, individual equities and exchange-traded funds.
President Trump referenced the trading platform during recent remarks, indicating CFTC Chairman Michael Selig is actively working toward establishing Hyperliquid’s presence in U.S. markets through “fully compliant and legal fashion.”
The Hype token surged 40% in value following Trump’s public endorsement, based on The Block’s market data.
CFTC Chairman Selig has characterized the regulatory challenge as determining operational location for perpetual markets rather than debating their existence. The commission is currently evaluating how current statutory authority can accommodate these financial products within domestic regulatory frameworks.
The Hyperliquid Policy Center’s formal submission represents one component of an extensive public consultation initiative as regulatory bodies evaluate strategies for incorporating the rapidly expanding perpetuals marketplace under domestic supervision.
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