- Hyperliquid told the CFTC that its platform safely supports 24/7 crypto futures trading with strong risk controls.
- It urged flexible rules that fit new crypto products instead of old regulations.
Decentralized finance (DeFi) protocol Hyperliquid recently made a significant move in the evolving landscape of U.S. cryptocurrency regulation. On May 22, the Hyper Foundation revealed it had submitted formal responses to the U.S. Commodity Futures Trading Commission’s (CFTC) request for comment regarding perpetual futures and 24/7 trading.
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Hyperliquid Case for Modern Regulatory Frameworks
Hyperliquid’s submission emphasized how its platform already manages continuous, around-the-clock trading with strong risk controls and user security built in. Unlike traditional markets with fixed trading hours, Hyperliquid’s onchain system operates 24/7, ensuring transparency by publicly recording all trades, margin adjustments, and liquidations on the blockchain.
Key to Hyperliquid’s risk management is the use of pre-funded collateral and automatic liquidations, which reduce counterparty risks common in derivatives trading. This approach, the team argued, makes the platform more resilient and open compared to legacy financial markets.
Advocating for Flexible Rules on Perpetual Derivatives
The protocol also weighed in on the CFTC’s inquiry into perpetual futures — crypto-native derivatives that have gained popularity due to several advantages. These products improve liquidity, remove the need for contract rollovers, and simplify integration with smart contracts. Hyperliquid urged the regulator to adopt flexible and risk-based rules instead of forcing these novel products into outdated regulatory boxes.
With decentralized perpetuals gaining nearly 70% of monthly trading volume share, Hyperliquid stands as a market leader. The protocol recently reached an all-time high of $3.2 billion in USDC total value locked (TVL). It also recorded $5.4 million in fees and $8.9 billion in open interest, showing strong growth and adoption. Meanwhile, the native token HYPE surged 85% in the past month and rose nearly 500% since April lows, highlighting robust market confidence.
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Bridging DeFi and Regulatory Compliance
Hyperliquid’s engagement with the CFTC signals a proactive effort by DeFi projects to work alongside regulators to create frameworks that protect users without stifling innovation. The team views its platform as a practical example of how decentralized finance can enhance modern markets through transparency, continuous trading, and robust risk controls.
As the CFTC considers future rules, Hyperliquid’s insights may shape U.S. crypto derivatives regulation. This could create a more balanced framework.
Hyperliquid’s submission shows the need for regulator-DeFi collaboration to create secure, liquid, and accessible crypto markets.
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