Hyperliquid Urges SEC and CFTC to Classify Equity Perpetuals as Security Futures

Hyperliquid Policy Center urges SEC and CFTC to clear path for equity perpetuals as security futures Hyperliquid’s policy arm has formally asked U.S. regulators to create a clear path for equity perpetual contracts to be listed as security futures, arguing that contracts with established futures-like features should fall under the existing joint SEC–CFTC security futures framework. The Aug. 24 comment letter from the Hyperliquid Policy Center (HPC) responds to a regulatory request for input on how swaps, security-based swaps and related products should be defined under U.S. law. Why this matters now Perpetual contracts—derivatives without a fixed expiry that use recurring funding payments to track an underlying price—have grown massively outside the U.S., but their legal classification at home remains unsettled. That uncertainty affects exchanges, intermediaries and institutional market access to synthetic equity exposure. HPC pointed to robust activity on its HIP-3 markets as context: those markets handled more than $480 billion in notional volume and held roughly $4 billion in open interest in the first 10 months after launch. Across Hyperliquid’s platforms, the filing says the protocol processed nearly $3 trillion in notional volume in 2025 and more than $1.5 trillion through Aug. 23, 2026. HPC’s proposal in brief - Classify products first by structure (future-like vs. swap-like) and then allocate regulatory authority based on the referenced asset. - Treat a perpetual on an individual stock that meets futures characteristics as a security future, bringing both the SEC and CFTC into play. - Preserve flexibility so truly bespoke, bilateral perpetual-style contracts that lack fungibility, multilateral execution, or offset rights can still be treated as swaps or security-based swaps. - Encourage the agencies to issue interpretive or staff guidance and update listing standards rather than waiting for formal rulemaking. Why HPC says perpetuals are futures HPC emphasizes structural features commonly used in futures analysis: - Perpetuals use recurring funding payments to keep contract prices close to an underlying reference, creating the same economic convergence that expiration and final settlement provide in dated futures. - Standardization, fungibility, fixed unit quantities and the ability to exit positions via offsetting trades—features present in Hyperliquid’s HIP-3 markets—are historically associated with futures contracts. - On HIP-3, markets operate via a central limit order book, continuous margining, public pricing, and synthetic exposure without ownership or voting rights in the underlying securities. Regulatory background and disputes U.S. regulators have already taken divergent approaches. In May the CFTC approved Kalshi’s Bitcoin perpetual (BTCPERP) as a federally regulated Bitcoin perpetual futures contract, despite its lack of a fixed expiration date; Kalshi launched that product in June and has since expanded into other crypto perps. That CFTC approval and policy guidance signaled that perpetuals can be treated as “contracts for future delivery,” but the agency also said other asset classes—equities in particular—merit joint SEC–CFTC involvement. Enforcement and litigation have produced mixed signals. Prior CFTC enforcement has sometimes treated perpetual-style products as swaps or as leveraged/margined retail commodity transactions. The SEC, in litigation such as the Mango Markets case, has disputed treating certain perpetuals as futures. CME Group has challenged Kalshi’s regulatory approach in court, arguing some perpetuals belong under the swaps framework rather than ordinary futures—creating a live legal dispute over the proper statutory footing. How Hyperliquid’s HIP-3 model factors in HIP-3 lets independent market operators—called deployers—create and govern perpetual markets, choosing assets, contract specs, oracle sources, leverage and open-interest caps. HPC highlighted that U.S. users currently cannot access Hyperliquid directly, so the liquidity and infrastructure cited in its filing developed offshore while domestic regulated access to perpetuals is limited. What HPC is asking regulators to do - Confirm that cash-settled equity perpetuals with established futures characteristics may be listed as security futures. - Harmonize taxonomy and listing standards between the SEC and CFTC so security futures rules can accommodate new contract structures. - Use guidance, policy statements or staff-level interpretive materials to provide clarity without waiting for rulemaking. - Preserve the ability to treat non-fungible, bespoke, bilateral perpetuals as swaps when appropriate. Implications If regulators accept HPC’s approach, exchanges could list equity perpetuals under the existing security futures regime, which assigns joint oversight and offers established notice-registration paths for CFTC-designated contract markets and national securities exchanges. That could open a regulated on‑ramp for perpetuals tied to stocks and ETFs—products that have seen huge activity in unregulated venues—while leaving room to treat bespoke instruments as swaps. The debate is active: regulators are soliciting public input, market participants are litigating the boundaries, and firms from traditional exchanges to crypto-native platforms are jockeying for clarity that could determine where and how these rapidly growing derivatives trade in the U.S.