The Hyperliquid Policy Center has formally urged the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a coordinated regulatory approach for perpetual contracts.
In a comment letter submitted on August 24, 2026, the group responded to a joint request from the agencies seeking public input on the definitions of swaps, security-based swaps, and related products under existing US derivatives law.
Perpetual contracts, which lack a fixed expiration date and instead use periodic funding payments to keep prices aligned with the underlying asset, have become one of the most actively traded derivatives globally.
Much of this activity has developed outside the United States due to ongoing uncertainty about how these instruments should be classified under federal law.
The letter argues that classification should focus on a contract’s economic features and trading characteristics rather than solely on the type of underlying asset—whether cryptocurrency, commodity, or equity.
The Hyperliquid Policy Center contends that cash-settled equity perpetual contracts possessing traditional futures traits, such as standardization, fungibility, the ability to offset positions, and mechanisms for price convergence, should qualify for treatment as security futures.
Security futures represent a product category already subject to joint oversight by both the SEC and CFTC.
Under this framework, exchanges primarily registered with one agency can list such products after notice registration with the other, enabling competition between securities and futures venues.
The existing security futures regime, the letter notes, was developed for instruments that remained largely inactive for years.
Although US exchanges have recently begun exploring the category again, updates are needed to accommodate contemporary structures like perpetuals.
Without a consistent taxonomy, disagreements over which regulator’s market participants may list a given product risk ending up in litigation.
A harmonized system, by contrast, would allow platforms to compete on factors such as execution quality and liquidity.
The group outlined four specific requests: confirm that cash-settled equity perpetuals meeting futures criteria may be listed as security futures; maintain flexibility for exchanges in determining product classifications; apply uniform standards so similar contracts receive comparable treatment regardless of the underlying asset; and modernize the security futures framework for newer designs.
These steps could be achieved through interpretive guidance, policy statements, or staff actions rather than lengthy formal rulemaking.
The timing follows the CFTC’s May 2026 approval of the first U.S.-listed perpetual contracts as futures, along with an accompanying policy statement.
That earlier action addressed certain non-equity underlyings but flagged equity-linked products for potential joint review.
Hyperliquid’s HIP-3 markets, which include contracts on oil, metals, currencies, equity indices, and individual stocks, have recorded more than $480 billion in trading volume over roughly ten months, with open interest around $4 billion.
Proponents of clearer rules argue that regulatory certainty would help bring substantial offshore activity onshore under American standards of oversight and investor protection.
Traditional exchanges have expressed concerns about market integrity and the need for appropriate registration of certain platforms.
The Hyperliquid Policy Center maintains that prompt guidance would support competition, innovation, and the return of these markets to regulated US venues. As the agencies review comments, the outcome could shape how perpetual contracts evolve within the domestic financial system and influence the broader treatment of novel derivatives.
