Hyperliquid urges unified rules for perpetual contracts amid $3 trillion surge

4h ago•

bullish:

bearish:

The crypto derivatives world is quietly waiting on Washington to answer a question that sounds simple but isn’t: what exactly is a perpetual contract? The Hyperliquid Policy Center wants regulators to settle that once and for all, and it has just told the SEC and CFTC why the push for unified rules on perpetual contracts can’t wait any longer.

Key takeaways

Hyperliquid Policy Center filed a comment letter urging the SEC and CFTC to build a harmonized framework for perpetual contracts, classified by economic structure rather than underlying asset.
Perpetual contracts have no expiration date and rely on recurring funding payments, leaving them stuck in a legal grey zone between futures and swaps.
CME sued the CFTC in June once the agency granted approval for the first U.S.-listed perpetual contracts offered by Coinbase and Kalshi.
Hyperliquid processed nearly $3 trillion in notional volume in 2025 and more than $1.5 trillion so far in 2026, with its HIP-3 markets alone generating over $480 billion since launching.
President Trump said CFTC Chairman Michael Selig is endeavoring to facilitate Hyperliquid’s entry into the U.S. market through a “fully compliant and legal” approach.”

Hyperliquid Urges Unified Regulatory Framework for Perpetual Contracts

Hyperliquid Policy Center wants federal regulators to stop treating identical financial products differently just because they reference different assets. In a comment letter filed this week, the group asked the SEC and CFTC to adopt a unified regulatory framework for perpetual contracts, arguing that classification should follow how a product actually functions rather than what it tracks.

That distinction matters more than it might sound. Under the current system, a perpetual contract tied to bitcoin can be treated completely differently from one tied to oil or a single stock, even when both instruments behave identically from a trading standpoint. The Hyperliquid Policy Center says that inconsistency creates confusion for exchanges, traders, and regulators alike, and it’s asking Washington to fix it before the market grows any larger.

Perpetual contracts, unlike traditional futures, carry no expiration date. Instead, they use recurring funding payments — a mechanism where long-position holders pay short-position holders when prices trade above the reference rate, and vice versa when they fall below it — to keep the contract price anchored to the underlying asset. That structure, the group argues, performs essentially the same job that a settlement date does in a conventional futures contract, just without the fixed endpoint.

Legal Ambiguity Fuels Regulatory Disputes and Litigation

The core problem, according to Hyperliquid Policy Center, is that U.S. law still hasn’t decided whether perpetual contracts count as futures or as swaps. That ambiguity isn’t just academic. It has already pushed one major exchange group into federal court, and it threatens to spark more litigation as the market keeps expanding.

Because perpetuals sit in a legal grey area, the group warns that disputes over which regulator’s registered exchanges are allowed to list a given product could end up being resolved by judges rather than policymakers. A shared classification standard, HPC argues, would let exchanges compete on execution quality and liquidity instead of fighting over jurisdiction.

CME Lawsuit Against CFTC

That risk isn’t hypothetical. During June, CME initiated legal action against the CFTC following the agency’s approval of the first U.S.-listed perpetual contracts offered by Coinbase and Kalshi, arguing the products should have been treated under the swaps framework rather than classified as ordinary futures. The lawsuit followed the CFTC’s May approval of Kalshi’s BTCPERP contract as a federally regulated bitcoin perpetual future — a decision that stood even though the product carries no fixed expiration date. Kalshi began offering the contract in June and later expanded its regulated perpetual lineup to additional cryptocurrencies, though the CFTC said further products would remain subject to review.

Without a settled taxonomy, similar fights could recur every time a new perpetual product launches, which is exactly the scenario Hyperliquid Policy Center is trying to head off with its proposal.

Market Concerns and Hyperliquid’s Trading Scale

Traditional exchange operators haven’t been shy about their unease with how fast this market has grown outside their own regulated venues. Both CME and ICE have expressed apprehension regarding the potential use of platforms such as Hyperliquid for market manipulation or distort prices, and both have suggested the platform should register directly with the CFTC.

Why does this matter beyond a policy dispute? Because the volumes involved are no longer niche. Hyperliquid handled nearly $3 trillion in notional trading volume in 2025 and more than $1.5 trillion so far in 2026, according to figures cited in the HPC filing. Its markets span bitcoin, ether, oil, gold, currencies, stock indexes, individual stocks, and ETFs — a breadth that increasingly resembles a full-scale derivatives venue rather than a crypto-only exchange.

Hyperliquid’s Extensive Market Coverage and Volume

A big share of that activity now runs through HIP-3, Hyperliquid’s framework that lets independent market operators, known as deployers, launch their own perpetual markets while the protocol itself handles order matching, margin enforcement, funding transfers, and settlement. Those HIP-3 markets have generated more than $480 billion in cumulative notional volume in their first ten months and currently hold roughly $4 billion in open interest, covering assets from crude oil and precious metals to foreign exchange, equity indexes, and individual stocks. Notably, U.S. users currently cannot access Hyperliquid at all, meaning this entire pool of liquidity has built up offshore while domestic access to comparable products remained limited.

Regulatory Developments and Political Attention

Regulators appear to be shifting the framing of this debate. Rather than debating whether perpetual markets should exist in the U.S. at all, the CFTC has increasingly focused on where those markets operate and how existing authority can accommodate them domestically. That framing suggests the agency sees onshoring, not prohibition, as the more likely path forward.

President Trump put that shift in the spotlight last week, saying CFTC Chairman Michael Selig is working to bring Hyperliquid into the United States in a “fully compliant and legal fashion.” The remark thrust a platform once confined to crypto-native trading circles into mainstream political conversation, and it followed a notable rally in Hyperliquid’s HYPE token in the days after.

CFTC Focus on Market Location Over Existence

Part of what makes Hyperliquid Policy Center’s proposal notable is its added push for equity perpetuals specifically. The group has asked regulators to recognize cash-settled equity perpetual contracts that carry the established characteristics of futures — standardized terms, fungibility, fixed unit quantities, and the ability to close a position through an offsetting trade — as security futures, a category already jointly overseen by both the SEC and CFTC.

HPC argues that regulators don’t need a lengthy rulemaking process to act. According to the filing, the SEC and CFTC could issue interpretive guidance or policy statements to confirm how equity perpetuals fit within the existing security futures structure, while still leaving exchanges flexibility to decide how individual products should be classified. Whether the agencies move that quickly remains an open question, but the comment letter makes clear that the debate over unified rules for perpetual contracts is no longer confined to crypto trading desks — it now sits squarely inside mainstream U.S. derivatives policy.