Wall Street energy exchanges urge U.S. crackdown on Hyperliquid

CME Group (CME) and Intercontinental Exchange (ICE), the company that owns the NYSE, are asking U.S. regulators to put Hyperliquid under tougher review.

Bloomberg claims that both companies raised concerns about market manipulation and possible sanctions risk, and they want Hyperliquid to register with the Commodity Futures Trading Commission. If that happens, the platform would need proper customer identity checks and systems that watch trades for abuse.

CME and ICE ask regulators to bring Hyperliquid under CFTC control

Hyperliquid has been called decentralized, but its structure still has clear control points, starting with HyperEVM (which now runs with 31 validators meant to be a better than the old setup, but still small compared with larger open networks).

The bigger concern is that user deposits sit behind one custody route, and that bridge is protected by a 3-of-4 multisig wallet. So, four signers matter a lot, because three can control the door and that is not a tiny detail when billions in trading activity are involved.

That design gives U.S. regulators a clear path if they decide to act. If American users are trading on Hyperliquid, even with the platform saying they should not, the CFTC can argue that the venue is touching the U.S. market.

The IP block is weak. The trading activity is large. The platform is not some tiny DeFi experiment sitting in a corner of the internet.

The pressure from CME and ICE also set off crypto Twitter. On-chain investigator ZachXBT wrote, “Interesting how NYSE only has issue with HL but not Polymarket. Never mind it all makes sense now.”

After that, another user replied to Zach by pointing out the irony around U.S. access. The person wrote, “Its just funny that both are still restricted in the US lmao, while all this talk is going on with them we cant even use them legitimately.”

Ansem had a different take after Coinbase (COIN) became the main treasury deployer for USDC on Hyperliquid. He wrote that “Coinbase becoming main treasury supplier of USDC is extremely bullish for Hyperliquid, not only adds ~$150M of yearly recurring revenue on the $5B in stables on the platform, but CB has a lot of what Hyperliquid needs to scale longterm, US regulatory wise & distribution wise.”

Coinbase gives Hyperliquid more stablecoin reach as ETF demand rises

The Coinbase link came at the same time as fresh ETF activity. 21Shares’ Hyperliquid ETF had stronger trading volume and net inflows on Thursday after Coinbase became the official treasury deployer for the perpetual trading platform.

USDC has been the main stablecoin on Hyperliquid since the platform launched in 2023, based on Coinbase’s statement. Now, Native Markets, the operator of USDH, has given Coinbase the right to buy the USDH brand assets.

The 21Shares HYPE ETF was the first spot fund tied to Hyperliquid. Bitwise launched its own product, the Bitwise Hyperliquid ETF (BHYP), on Thursday. Together, the two funds have brought in almost $8.2 million in net inflows, based on SoSoValue data.

Hyperliquid was designed by Hyperliquid Labs, a team of engineers and researchers connected to Harvard, MIT, and Caltech, as well as individuals who previously worked for traditional trading and tech companies. At present, the Hyperliquid protocol is managed by the Hyper Foundation.

Unlike other decentralized exchanges, Hyperliquid doesn’t use any automated market makers, but has a complete on-chain order book for spot and perpetual trades, aiming to reduce slippage.

Hyperliquid’s architecture consists of three major elements. First, HyperBFT represents the network’s high-performance consensus algorithm based on the HotStuff consensus algorithm.

Second, HyperCore is a Rust-based engine responsible for processing order books, margin, settlement, liquidations, spot markets, and perpetuities, supporting up to 200,000 transactions per second.

HyperEVM provides developers with the ability to run Solidity-based smart contracts within the same consensus layer while allowing integration with HyperCore liquidity without utilizing the bridge solution.

The native cryptocurrency of Hyperliquid is HYPE, used for staking, delegation of validators, governance, HyperEVM gas fees, and discounts on trading fees. Currently, with a valuation of around $10.8 billion, Hyperliquid occupies a significant part of weekly blockchain fee revenue earned by derivatives trading.

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