Hyperliquid Policy Center Urges SEC, CFTC to Harmonize Perpetuals Rules

The Hyperliquid Policy Center has formally requested that U.S. regulators, specifically the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), establish consistent rules for perpetual contracts. The group advocates for a classification system that depends on each contract's specific structure and trading characteristics, aiming to provide regulatory clarity and potentially open the door for more perpetual markets to operate under U.S. oversight.

Federal law currently categorizes derivatives primarily as futures or swaps, but perpetual contracts, which lack a fixed expiration date and utilize funding payments to maintain price alignment with underlying assets, share features of both. This ambiguity has created uncertainty regarding their legal treatment. The Hyperliquid Policy Center suggests that the underlying asset should dictate which regulator has jurisdiction, but this reference asset should not alter whether the product is classified as a future or a swap, ensuring similar contracts receive uniform treatment.

For equity perpetuals, the proposal indicates that cash-settled contracts with traditional futures characteristics could be classified as security futures, a category already overseen by both the SEC and CFTC. This would allow them to be listed on registered securities and futures exchanges under the existing framework.

This regulatory discussion follows recent actions by both agencies. In May, the CFTC approved the first U.S.-listed perpetual contracts to trade as futures. Both the SEC and CFTC have also solicited public feedback on how existing derivatives rules apply to novel products like perpetuals, considering definitions for swaps, security-based swaps, futures, and security futures.

Furthermore, the Hyperliquid Policy Center urged regulators to maintain flexibility for exchanges in product listing decisions and to update the security futures framework to accommodate newer contract structures. Clarity could be provided through interpretive guidance, policy statements, or staff actions, with formal rulemaking potentially following as regulators gain more experience.

The proposal coincides with efforts to bring more perpetual trading under domestic oversight. President Donald Trump recently stated that CFTC Chairman Michael Selig is working on a compliant pathway for Hyperliquid to enter the United States. Over the past ten months, Hyperliquid markets have facilitated more than $480 billion in perpetual contract volume across commodities, currencies, equity indices, and individual stocks.