The Hyperliquid Policy Center submitted a formal comment letter on August 24 urging the Securities and Exchange Commission and Commodity Futures Trading Commission to establish a coordinated regulatory approach for perpetual contracts. The group argued that clearer product definitions would enable more of these instruments to trade within the regulated U.S. financial system.

Perpetual contracts have become a major global derivatives product yet lack a settled classification under U.S. law. Traditional derivatives rules divide products into futures and swaps. Perpetuals share traits with both: they never expire, instead relying on recurring funding payments to keep prices aligned with the underlying assets. This hybrid nature has left open the question of which agency holds primary authority and which rules apply.

Proposed Classification Approach

The policy center recommended that regulators first examine a contract’s economic structure and trading characteristics to decide whether it qualifies as a future or a swap. Standardized terms, fungibility, the ability to close positions through offsetting trades, continuous margin maintenance, and public pricing are among the hallmarks historically associated with futures contracts. The absence of a fixed expiration date, the group maintained, does not automatically disqualify a product from futures treatment.

Once the contract type is determined, the underlying asset would dictate which agency has jurisdiction. Under this method, similar perpetual products would receive consistent classification regardless of whether they reference commodities, currencies, equity indexes, or individual stocks. Cash-settled equity perpetuals that meet the futures criteria could then be treated as security futures, a category already subject to joint SEC and CFTC oversight. Registered securities exchanges and futures exchanges are already permitted to list security futures under existing rules.

The comment letter responds to a joint request for public input from the two commissions on how to further define swaps, security-based swaps, and related exclusions. The policy center outlined four concrete steps: confirm that qualifying equity perpetuals can be listed as security futures; preserve exchanges’ existing flexibility in product-listing decisions; maintain consistent classification across both agencies; and modernize the security-futures framework to accommodate contemporary contract designs. These steps, the group said, could begin through interpretive guidance, policy statements, or staff actions rather than immediate formal rulemaking.

Market Activity and Regulatory Backdrop

Independent markets operating under Hyperliquid’s HIP-3 framework have generated more than $480 billion in cumulative notional trading volume across commodities, foreign exchange, equity indexes, single stocks, and related products during their first ten months. Those markets currently hold roughly $4 billion in open interest. All of that activity has developed outside the United States because no clear domestic regulatory pathway has existed for the products.

Regulators have already taken limited steps into the space. In May the CFTC approved the first U.S.-listed perpetual contract, Kalshi’s Bitcoin product, and permitted it to trade as a futures contract. The accompanying policy statement specifically noted that equity-based perpetuals would require joint review by both agencies. In July, CME Group relaunched single-stock futures, marking the first meaningful activity in the security-futures category in years.

The Hyperliquid Policy Center was established in February by the Hyper Foundation with an endowment of one million HYPE tokens, then valued at approximately $30 million. Crypto attorney Jake Chervinsky serves as its chief executive. The group’s advocacy coincides with public remarks by President Donald Trump indicating that CFTC Chairman Michael Selig is examining a compliant route for Hyperliquid to operate in the United States.

Traditional exchanges have expressed concerns about the growth of offshore perpetual markets, and litigation has already arisen over the CFTC’s classification of certain perpetual products as futures rather than swaps. The policy center’s filing seeks to resolve the underlying definitional uncertainty so that future listing decisions rest on transparent, consistent standards rather than prolonged jurisdictional disputes.