UK FCA Warns Against Hyperliquid Amid Regulatory Debate Over Crypto Perpetuals

Headline: UK FCA flags major perp venue Hyperliquid as debate over crypto perpetuals intensifies Hyperliquid — one of the largest decentralized venues for cryptocurrency perpetual futures — has been thrust back into the regulatory spotlight after the UK’s Financial Conduct Authority (FCA) warned the platform may be operating in the U.K. without authorization. In a notice dated May 21, the FCA listed Hyperliquid and the Hyper Foundation, along with the protocol’s app and social channels, as potentially offering or promoting financial services in the U.K. without permission and urged consumers to “avoid dealing” with the platform. The notice drew little attention at the time but resurfaced this week after appearing more prominently in searches reviewed by Decrypt. Why it matters Perpetual futures, or “perps,” let traders bet on token prices with leverage and no fixed expiry. Unlike standardized futures on regulated exchanges such as CME, perps remain open indefinitely and rely on funding payments to tether contract prices to spot markets. These instruments have grown into a major venue for directional bets on crypto, and Hyperliquid sits near the center of that market. By May 20 the protocol reportedly generated about $255 million in year-to-date revenue, while its HYPE token had jumped roughly 101% over the same period — figures that underline the market footprint regulators and incumbents are now scrutinizing. Regulatory and institutional pressure rising The FCA’s warning arrives amid heightened debate about how perpetuals should fit into regulated markets. CME Group CEO Terry Duffy warned this week — via Reuters reporting — that crypto perps could become a “disaster waiting to happen” as U.S. regulators permit similar products into supervised markets, criticizing the Commodity Futures Trading Commission’s approval process for what he called “novel and complex” instruments. Intercontinental Exchange CEO Jeffrey Sprecher has also said his firm is studying Hyperliquid’s model and questioning why traditional venues can’t offer comparable products. Two days after Sprecher’s remarks, the CFTC approved prediction-market platform Kalshi to offer Bitcoin perpetual futures, a sign that U.S. authorities are beginning to allow certain perp-style products under regulated frameworks. Industry view Matthew Pinnock, COO of Altura DeFi, told Decrypt that crypto perps “have grown into one of the dominant mechanisms for expressing directional views on digital assets,” and that volumes on venues like Hyperliquid make it “impossible” for traditional market participants to treat them as peripheral. Pinnock added that U.S. product approvals and rising institutional interest are pushing the question of how perps belong within regulated markets, and that regulators are increasingly focused on the role perps play in price discovery — often allowing traders to take positions before traditional markets provide similar access. What’s next Pinnock said the real test will come if markets turn sharply: can liquidation systems, margin rules, and market surveillance withstand stress? The FCA warning and divergent approaches between the U.K. and U.S. suggest a patchwork regulatory landscape ahead, with offshore venues flagged in some jurisdictions even as other regulators permit supervised perp products. For traders and institutions, the evolving treatment of perps — and enforcement actions or approvals that follow — will be crucial to watch.