key insights
- Responsibility for regulation is still controversial. Yan prefers that obligations be imposed on entities with market power, but that the regulatory burden to assess the specific circumstances remain with regulators.
- There may be an increase in access to the institution. Payward’s offering provides a potential roadmap to regulated intermed offering of Hyperliquid-based derivatives to US customers.
- Competition may intensify. Blockchain infrastructure could help traditional firms develop new trading products while challenging established derivatives platforms.
Hyperliquid founder Jeff Yan called on US regulators to focus compliance obligations on financial firms operating markets rather than the underlying blockchain, during an October 15 interview with Bloomberg’s Odd Lots podcast. His proposal could help traditional financial institutions use decentralized trading infrastructure while allowing Hyperliquid’s network to remain separate from the regulated businesses built on it.
Hyperliquid Founder Jeff Yan Says US Regulation Should Target Market Operators, Not the Underlying Blockchain
Hyperliquid founder Jeff Yan told Bloomberg's Odd Lots podcast that US regulators should treat Hyperliquid's Layer 1 blockchain as financial infrastructure rather than a… pic.twitter.com/APajp44kY6
— Wu Blockchain (@WuBlockchain) October 15, 2026
Yan draws a line between networks and markets
Yan said that regulatory responsibility should go with control over activities. Companies that run trading markets handle customer relationships. Direct oversight should meet the rules, not the blockchain infrastructure itself.
He likened the setup to the internet, which underpins services without acting as a financial middleman. Yan believes that blockchain networks give the framework for liquidity and trade processing while each business decides how customers reach markets.
Yan told the interviewer, “Regulation is at the layer where controls exist and indeed the deployers are the ones who exercise those controls.”
Thus Yan’s view challenges ways that see trading protocols as normal exchanges. It also brings up questions, about how regulators should assign responsibility when trading happens on infrastructure.
Hyperliquid runs a Layer 1 blockchain and a decentralized perpetual futures platform. Perpetual futures let traders keep positions without fixed expiry dates usually with leverage.
However, the platform remains unavailable to US customers under its existing access restrictions. Yan’s proposed framework could create a route for regulated institutions to offer products using its technology without requiring the entire network to become a licensed exchange.
Payward plan offers a potential US route
The discussion follows Payward’s September 16, 2026, announcement of plans to offer onchain perpetual futures to US customers, beginning with markets built on Hyperliquid.
Payward, the parent company of Kraken, explained a system that defines the duties of financial institutions under regulation. Under the proposal, Bitnomial Exchange would list the contracts, while Bitnomial Clearinghouse would handle derivatives clearing. NinjaTrader Clearing would manage customer accounts.
The proposed listings remain subject to regulatory approval. Therefore, the arrangement represents a potential entry route rather than confirmation that US customers can already trade these products.
The plan relies on Hyperliquid Improvement Proposal 3, commonly called HIP-3. This structure enables them to have independent builders deploy perpetual markets on the network.
Market deployers are required to stake 500k HYPE and lock in their stake for 183 days after launch. Hyperliquid also offers permissioned markets as well, providing the ability for operators to create allowlists.
These features could help regulated firms establish controlled trading environments while using the underlying blockchain’s infrastructure. Nevertheless, the final compliance obligations would depend on applicable rules and each operator’s activities.
Washington expands its crypto market framework
US policymakers have increasingly discussed ways to bring offshore cryptocurrency trading into regulated domestic markets.
On August 19, President Donald Trump said Commodity Futures Trading Commission Chairman Michael Selig was working to bring Hyperliquid into the United States legally. Reports later indicated that Hyperliquid was discussing potential market access arrangements with Bitnomial.
The CFTC advanced its broader regulatory efforts in October. On October 5, the agency released an advance notice of proposed rulemaking covering Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets.
The notice appeared in the Federal Register on October 13, opening a 60-day public comment period. Regulation CAM would establish a proposed registration category for markets offering leveraged, margined, or financed retail cryptocurrency trading.
Selig also described the proposals as an optional federal pathway for exchanges seeking a single market regulator. His role implies that regulators could go for creating a framework for market access while not mandating that all cryptocurrency assets must only be traded on registered exchanges.
But Yan’s separation of the blockchain infrastructure and market participants isn’t necessarily the resolution to the legal puzzle. Regulators could still review the impact of developers, governance actors and other parties on the operations of a protocol.
Traditional exchanges face a new competitive challenge
Hyperliquid’s approach could create opportunities for established financial firms seeking blockchain-based trading and settlement infrastructure. Instead of replacing conventional exchanges, Yan said the technology could support businesses already operating traditional markets.
He compared the ambition to Amazon Web Services, which supplies computing infrastructure to companies rather than directly replacing their businesses.
The proposal also arrives amid resistance from established derivatives operators. CME Group has challenged the CFTC in court over approvals involving perpetual futures. Meanwhile, the Hyperliquid Policy Center has advocated for a joint SEC and CFTC rulebook covering perpetual contracts.
The controversy raises a larger issue of competition and accountability of regulators. Traditional exchanges are licensed and monitored, and decentralised exchanges bring various models into play of how access is controlled and transactions executed.
