TLDR
- Hyperliquid Policy Center submitted a formal request to SEC and CFTC for harmonized perpetual contract classification standards
- The proposal advocates for classification based on contract mechanics rather than the underlying reference asset
- HIP-3 markets on Hyperliquid have processed over $480 billion in trading volume across 10 months with open interest reaching $4 billion
- Legacy exchanges including CME and ICE have expressed opposition to Hyperliquid, with CME filing litigation against CFTC regarding perpetual futures in June
- President Trump announced CFTC efforts to facilitate Hyperliquid’s compliant entry into U.S. markets
In a formal submission to federal regulators, the Hyperliquid Policy Center has called for the creation of a consistent regulatory approach to perpetual contracts. The advocacy group is requesting that the Securities and Exchange Commission and Commodity Futures Trading Commission end the practice of applying divergent standards to identical products based solely on jurisdictional boundaries.
Unlike conventional futures contracts that carry specific expiration dates, perpetual contracts operate indefinitely. These instruments utilize funding rate mechanisms to maintain price alignment with their reference assets. This unique design positions them in regulatory limbo between futures and swaps under existing U.S. financial regulations.
According to the Hyperliquid Policy Center, the proper approach to classification should focus on the economic mechanics of each contract rather than the nature of its underlying asset. The organization contends that whether a perpetual contract references cryptocurrency, commodities, or equities should have no bearing on its legal definition.
Additionally, the organization proposed that cash-settled equity perpetuals exhibiting futures-like attributes could be categorized as security futures. This product class already falls under joint regulatory supervision by both the SEC and CFTC.
Regulatory Gaps Create Legal Risk
The HPC warns that without establishing clear definitional boundaries, jurisdictional conflicts regarding which regulator’s approved venues can offer specific products may ultimately require judicial resolution. A harmonized regulatory structure would shift competitive dynamics toward market quality metrics such as liquidity depth and execution efficiency rather than exploiting regulatory uncertainty.
These legal complications have already materialized. CME Group initiated legal action against the CFTC following the agency’s authorization of the first domestically-listed perpetual contracts for Coinbase and Kalshi in June. Both CME and Intercontinental Exchange have voiced apprehensions that platforms such as Hyperliquid could facilitate market manipulation.
The CFTC greenlit these inaugural perpetual contracts in May. Following that decision, both regulatory agencies have been soliciting industry input regarding how current derivatives regulations should be applied to emerging product categories.
The policy center’s submission also recommended granting exchanges greater autonomy in product listing determinations. It suggested that preliminary regulatory clarity could be established through interpretive guidance or staff-level actions, with comprehensive rulemaking to be implemented subsequently.
Hyperliquid’s Growth Draws Presidential Attention
Hyperliquid processed approximately $3 trillion in notional trading volume throughout 2025 and has already exceeded $1.5 trillion in the current year. The platform’s product offerings span bitcoin, ethereum, crude oil, gold, foreign exchange, equity indices, individual equities, and exchange-traded funds.
During remarks last week, President Trump referenced the platform directly, stating that CFTC Chairman Michael Selig is actively working toward enabling Hyperliquid’s U.S. market presence through “fully compliant and legal” channels.
The platform’s native Hype token experienced a 40% price increase immediately following the President’s statements, based on The Block’s market data.
Chairman Selig has characterized the regulatory challenge as determining the appropriate location for perpetual markets rather than debating their legitimacy. The commission is currently evaluating how its established regulatory authority can be applied to integrate these products into domestic financial markets.
The comment letter from the Hyperliquid Policy Center represents one component of an extensive public consultation initiative as regulators consider strategies for incorporating the rapidly expanding perpetuals sector under U.S. regulatory oversight.
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