TL;DR
- Jeff Yan proposed that U.S. regulators oversee companies operating on Hyperliquid rather than the blockchain itself.
- The Hyperliquid founder believes regulatory obligations should fall on entities that control financial trading activities.
- Kraken’s parent company, Payward, plans to offer derivatives in the United States through a regulated exchange using Hyperliquid’s technology.
Jeff Yan, founder of Hyperliquid, proposed that U.S. authorities regulate financial firms using his blockchain rather than subjecting the underlying network itself to regulatory oversight.
His proposal would allow traditional financial institutions to develop trading markets on Hyperliquid’s infrastructure without requiring the blockchain to register as a regulated exchange.
During an interview with Bloomberg, Yan argued that regulatory obligations should apply to entities that control trading operations. He compared this approach to how the Internet operates, where companies providing financial services must comply with applicable regulations, while the technological infrastructure they use is not subject to the same requirements.
“Regulation sits at the layer where controls exist, and it is precisely the operators who exercise those controls,” he explained.
Kraken Prepares to Offer Derivatives Using Hyperliquid
Hyperliquid is primarily known for its perpetual futures trading platform, which currently does not allow U.S. customers to trade. However, its technology could be used to offer regulated financial products in the country.
Payward, the parent company of Kraken, plans to offer derivatives to U.S. investors through a regulated exchange that will use Hyperliquid’s technology.
This initiative would bring an operator supervised by the U.S. Commodity Futures Trading Commission (CFTC) onto Hyperliquid’s infrastructure, even as its perpetual futures market remains unavailable to U.S. users.
Yan Advocates Integration With Traditional Markets
Yan’s proposal would allow Wall Street institutions to build trading platforms on Hyperliquid and assume their regulatory obligations directly, without requiring the blockchain itself to operate as a regulated exchange.
“We’re not trying to displace anything,” Yan said. He also argued that the technology could benefit institutions currently operating in traditional financial markets.
His comments follow remarks made in August by President Donald Trump, who said the CFTC was working to bring Hyperliquid into the U.S. market under federal regulation.
