Key Takeaways:
Hyperliquid Policy Center asked the SEC and CFTC to classify qualifying equity perpetual contracts as security futures, citing more than $480 billion in notional volume across HIP-3 markets in their first 10 months.
The Aug. 24 comment letter, filed in response to the agencies' joint request for input on how U.S. law should define swaps and security-based swaps, argued that cash-settled equity perpetuals carrying established futures characteristics should fall under the jointly overseen security futures category. The group described the classification question as unresolved even as perpetual contracts have expanded outside the United States.
The filing cited standardized terms, fungibility, fixed unit quantities and the ability to close a position through an offsetting trade as features courts and regulators have used to identify futures contracts. It noted the CFTC's May 29 approval of Kalshi's Bitcoin perp as the first federally regulated perpetual futures contract, and CME Group's subsequent legal challenge arguing such products should be treated as swaps rather than ordinary futures.
A favorable ruling would open the U.S. market to crypto-native equity perpetual trading, expanding Hyperliquid's addressable market and setting a precedent for other DeFi protocols seeking regulatory clarity. The agencies could issue interpretive guidance or policy statements without waiting for formal rulemaking.
HIP-3 volume puts $480 billion behind the debate
HPC tied its request to trading activity already running through Hyperliquid's HIP-3 framework, where independent market operators known as deployers create their own perpetual markets. The protocol handles execution, price-time order matching, margin enforcement, funding transfers, clearing and settlement, while deployers control listed assets, contract specifications, oracle sources, leverage limits and open-interest caps.
HIP-3 markets now cover crude oil, gold, other precious metals, foreign exchange, equity indexes, individual equities and exchange-traded funds for users outside the United States. Over the 10 months after HIP-3's launch, those markets accumulated more than $480 billion in notional trading volume and held roughly $4 billion in open interest, according to the filing. Across Hyperliquid as a whole, markets processed nearly $3 trillion in notional volume during 2025 and more than $1.5 trillion during 2026 through Aug. 23.
HPC said U.S. users currently cannot access Hyperliquid, meaning the liquidity described in its filing developed outside the country while regulated domestic access to perpetual contracts remained limited.
Security futures would put equity perps under both regulators
HPC proposed using the existing security futures framework for equity perpetuals that meet futures characteristics because the category already assigns oversight to both agencies. Under the framework, a designated contract market regulated by the CFTC can list security futures after notice-registering with the SEC, while a national securities exchange can cross in the other direction.
Security futures have seen limited commercial activity since OneChicago closed in 2020, but the filing noted renewed interest this year. CME Group announced in June it would launch single-stock futures beginning July 27, returning U.S. exchange activity to a product category that had been largely dormant.
HPC asked the agencies to confirm that cash-settled equity perpetuals carrying established futures characteristics may be listed as security futures, while allowing exchanges flexibility in classifying individual products. The group also requested a consistent taxonomy between the two regulators and asked them to update the security futures framework so existing listing standards can accommodate new contract structures.
The SEC and CFTC could issue interpretive guidance, policy statements or staff-level guidance without waiting for a formal rulemaking, according to the filing. The agencies also have joint authority to modify security futures listing standards, which they previously used for American Depositary Receipts, ETFs, closed-end fund shares and debt securities.
This article is for informational purposes only and does not constitute investment advice.
