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- Hyperliquid co-founder Jeff Yan advocated a regulatory approach that places compliance obligations on firms controlling markets on its blockchain.
- Representatives of the Hyperliquid Policy Center, XYZ Ltd. and Sullivan & Cromwell met with SEC Crypto Task Force staff July 14.
- The CFTC's Oct. 5 rulemaking notice begins a consultation process and does not authorize Hyperliquid’s U.S. expansion or adopt Yan's model.
Hyperliquid co-founder Jeff Yan has advocated a regulatory approach that places obligations on firms operating markets on its blockchain. Speaking on the Odd Lots podcast released Oct. 15, he argued that oversight should apply where those firms exercise control.
Yan Separates Market Operators From Blockchain Infrastructure
Yan described Hyperliquid as infrastructure that financial institutions could use while retaining their customer relationships. He said established firms could adopt the technology to improve their services rather than be displaced by it.
His proposed distinction centers on market deployers, the participants that launch and administer individual markets. These operators specify contract terms and provide price feeds that connect derivatives to the assets they track, Yan explained.
Yan compared the blockchain’s role with internet protocols used to build financial services. He argued that regulation should apply to deployers because they exercise control over individual markets.
Hyperliquid Ecosystem Seeks a Regulated U.S. Path
A Securities and Exchange Commission (SEC) memorandum records a July 14 meeting between its Crypto Task Force staff and representatives of the Hyperliquid Policy Center, XYZ Ltd. and Sullivan & Cromwell. The discussion concerned approaches to crypto-asset regulation.
An attached meeting request described the policy center’s goal as establishing a regulated pathway for Americans to access on-chain markets. It identified Hyperliquid Labs as a software contributor and XYZ as a developer of traditional-asset perpetual markets.
CFTC Seeks Comments on Crypto Market Rules
Separately, the Commodity Futures Trading Commission (CFTC) announced an advance notice of proposed rulemaking on Oct. 5. The consultation concerns retail crypto-asset transactions involving leverage, margin, or financing. It also considers a dedicated registration category for markets offering those transactions.
The agency said comments would inform possible future action. The notice begins a rulemaking process and does not itself adopt Yan’s operator-focused model or authorize Hyperliquid’s U.S. expansion.
