Hyperliquid HPC Calls for Unified Regulation of Perpetual Contracts

[Mexico City = Shim Young-jae, Correspondent] The Hyperliquid Policy Center (HPC) has requested the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a unified regulatory framework for perpetual contracts. They argue that products should be classified based on their economic structure rather than the underlying asset, such as Bitcoin, oil, or stocks.

In a statement released on the 24th (local time), HPC claimed that if SEC and CFTC build a harmonized regulatory system that they can jointly supervise, it could attract the rapidly growing perpetual contract market into the U.S. The HIP-3 market of Hyperliquid has surpassed a cumulative trading volume of $480 billion within just 10 months of its launch, with open interest reaching approximately $4 billion.

"Classifying by Economic Structure, Not by Bitcoin, Oil, or Stocks"

According to The Block, HPC stated in its public opinion that perpetual contracts should be classified based on the economic structure of the product itself rather than the type of underlying asset.

Currently, in the U.S., the jurisdiction of the SEC and CFTC can vary depending on whether a product is based on securities or on commodities or digital assets.

HPC believes that this classification method could conflict with the new structure of the perpetual contract market.

The policy center stated via X (formerly Twitter) that "securities and futures are a product group supervised by both commissions, and exchanges registered with both the SEC and CFTC can list them." They further explained that even if a registered operator is primarily supervised by one agency, it can enter the jurisdiction of the other agency's products through a reporting registration process, allowing securities exchanges and futures exchanges to compete within the same product group.

However, HPC argued that the current securities and futures regulatory framework was created based on a market that has been commercially stagnant for a long time, and it needs to be modernized to accommodate new product structures.

Competition in Liquidity and Execution Instead of Jurisdictional Disputes

The core issue raised by HPC is the jurisdictional boundaries between regulatory agencies.

According to The Block, HPC argued that without a clear product classification system, disputes could arise over which regulatory agency a specific product can be listed on, potentially leading to court cases.

Conversely, if the SEC and CFTC establish a common regulatory framework, exchanges could compete based on execution quality and liquidity instead of jurisdictional disputes.

HPC believes that defining product groups based on the economic characteristics of perpetual contracts could reduce the need to revisit jurisdictional issues every time a new product is introduced.

This proposal comes at a time when the perpetual contract market is expanding in the U.S., intensifying competition between traditional exchanges and on-chain platforms.

HIP-3 Trading Volume Reaches $480 Billion

Hyperliquid operates a perpetual contract market based on various assets.

According to The Block, Hyperliquid trades perpetual products linked not only to Bitcoin and Ethereum but also to oil, gold, currencies, stock indices, individual stocks, and exchange-traded funds (ETFs). Notably, the HIP-3 market has surpassed a cumulative trading volume of $480 billion within just 10 months of its launch.

According to HPC's opinion, the open interest in this market is approximately $4 billion. The overall trading volume of Hyperliquid is much larger than this.

The Block reported that Hyperliquid processed about $3 trillion in nominal trading volume last year. So far this year, trading has exceeded $1.5 trillion.

As the perpetual contract market rapidly expands, traditional U.S. derivatives exchanges are beginning to view platforms like Hyperliquid as subjects of regulatory discussions.

CME and ICE Express Concerns Over Price Distortion

Traditional exchanges are expressing caution regarding the expansion of the perpetual contract market in the U.S.

The Block cited reports indicating that some traditional exchanges, including CME and ICE, are concerned that platforms like Hyperliquid could be used to manipulate or distort prices. These exchanges are said to hold the position that Hyperliquid should be registered with the CFTC.

According to The Block, CME filed a lawsuit against the CFTC in June regarding the CFTC's approval of the first perpetual contract trading by Coinbase and Kalshi. This indicates that the interests surrounding how far the perpetual contract market will be allowed in the U.S. and what regulatory framework will apply have already entered the legal dispute stage.

HPC's demand for a joint regulatory framework from the SEC and CFTC is also related to this environment.

Trump: "Fully Compliant and Legal in the U.S."

Hyperliquid itself is rapidly becoming central to recent regulatory discussions in the U.S. According to The Block, U.S. President Donald Trump mentioned Hyperliquid directly last week.

On the 19th, President Trump stated that the CFTC is working to bring Hyperliquid's on-chain perpetual contract exchange into the U.S. "in a fully compliant and legal manner." Following this statement, the price of Hyperliquid's token reacted strongly.

According to The Block's price data, HYPE rose by about 40% following President Trump's remarks. However, this HPC opinion does not mean that Hyperliquid's entry into the U.S. has been confirmed. The key issue is how the SEC and CFTC will classify perpetual contracts and how they will jointly supervise them.

Testing the Inclusion of the U.S. Perpetual Contract Market into the Regulatory Framework

This discussion goes beyond the issue of Hyperliquid's entry into the U.S. platform. Hyperliquid trades perpetual products based not only on digital assets like Bitcoin and Ethereum but also on oil, gold, currencies, stocks, and ETFs.

Under the existing method of dividing regulatory agencies based on underlying assets, the supervising authority can vary for different products even within a single platform.

HPC argues that this issue should be redesigned around the economic structure of the products.

In contrast, existing exchanges like CME and ICE raise concerns about the potential for price distortion and registration obligations.

Whether the U.S. perpetual contract market can be integrated into the regulatory framework will depend on whether the SEC and CFTC can create common rules and apply the same competitive conditions to both existing exchanges and on-chain platforms.