Key Highlights
- Hyperliquid Policy Center and trade[XYZ] submitted an August 18 comment letter to the SEC on IPO modernisation.
- The filing asks the agency to consider pre-IPO perpetuals as a potential source of pricing information before public listings.
- The contracts provide cash-settled price exposure rather than ownership of the underlying company.
The Hyperliquid Policy Center (HPC) and trade[XYZ] have asked the U.S. Securities and Exchange Commission (SEC) to consider pre-IPO perpetual contracts as part of its ongoing review of how to modernise the U.S. IPO process.
According to a letter submitted on August 18, 2026, the groups said these contracts could provide a publicly visible price for companies in the period between a public filing and their eventual stock-market debut.
The proposal comes as the SEC examines changes to the IPO process and as regulators separately consider how perpetual futures should be treated under U.S. securities and derivatives rules.
What the proposal covers
The contracts, called IPOPs, are cash-settled perpetual derivatives linked to the expected share price of a private company preparing to go public.
They do not give traders ownership of the referenced company.
An IPOP holder receives no shares, voting rights, dividends or IPO allocation. The position instead provides exposure to changes in the price associated with the expected listing.
The filing says trade[XYZ] generally launches these markets after an issuer has entered the public filing process and limits their duration around the expected listing.
Once the company goes public, the IPOP can transition to a standard perpetual market using external market data. If the listing does not occur within the specified period, predetermined settlement rules apply.
Filing cites five completed markets
HPC and trade[XYZ] cited five completed IPOP markets involving Cerebras, Quantinuum, SpaceX, SK Hynix and ChangXin Memory Technologies (CXMT) to support their case for further regulatory consideration.
According to the filing, final IPOP prices before the respective stocks began trading were 0.44% to 7.23% away from their eventual opening prices.
For Cerebras, the IPOP traded at around $289 the day before its listing, compared with an IPO price of $185 and an opening price of $350. For SK Hynix, the IPOP was around $169.26, close to its $170 Nasdaq opening price.
The CXMT example showed a wider gap, with an IPO price of about $1.28 and an opening price near $7.31 on the Shanghai exchange.
HPC and trade[XYZ] said the examples indicate that IPOPs can provide useful pre-listing price signals, although the analysis is based on only five completed markets.
IPOP markets are not Equity ownership
The filing distinguishes IPOPs from private-company secondary markets, where investors purchase interests that can represent actual ownership.
An IPOP does not involve a transfer of shares.
Instead, it provides synthetic price exposure and settles in USDC, according to the submission.
That distinction also means an IPOP does not give traders a direct claim against the issuer.
The groups argue that the product could therefore serve a different purpose from private-market share transactions, particularly for investors seeking information about expected market pricing rather than ownership.
Hyperliquid’s HIP-3 framework
The proposed markets operate through Hyperliquid’s HIP-3 framework, which allows independent deployers to create perpetual markets using Hyperliquid’s underlying trading infrastructure.
Under the framework, deployers can determine which assets are listed and set parameters such as leverage, margin requirements and open-interest limits. Hyperliquid provides the underlying execution, clearing and settlement infrastructure.
The filing says HIP-3 markets have recorded more than $450 billion in cumulative trading volume and nearly $4 billion in open interest across equities, indices and commodities.
However, trade[XYZ]’s markets, including IPOPs, are currently unavailable to U.S. persons.
The comment letter therefore represents a request for regulatory consideration rather than an announcement that the products will be offered to American investors.
SEC-CFTC classification is a key question
One of the main issues raised in the filing is how equity-linked perpetuals should be classified under U.S. law.
HPC and trade[XYZ] ask the SEC and the Commodity Futures Trading Commission (CFTC) to consider whether IPOPs should be treated as security futures or security-based swaps.
The classification would determine requirements involving registration, trading venues, clearing, margin and other regulatory obligations.
The issue follows an earlier August 7 submission from the Hyperliquid Policy Center, in which the group asked the CFTC to continue its phased review of perpetual futures and examine potential applications beyond cryptocurrency markets.
That earlier submission focused on the broader regulatory treatment of perpetuals, while the new SEC filing applies the discussion specifically to equity-linked contracts surrounding IPOs.
Five Regulatory Questions for the SEC
Rather than asking for immediate approval of IPOPs, the filing identifies several regulatory issues that the SEC would need to address.
These include:
- Product classification: Whether equity-linked perpetuals should be treated as security futures or security-based swaps.
- Disclosure: What information investors should receive about leverage, funding, liquidation, pricing and settlement.
- Listing requirements: Whether IPOPs should only be permitted after a company publicly files its registration statement and within a defined period before its offering.
- Investor access: Whether retail investors should eventually be permitted to trade the products and what protections would apply.
- Market integrity: Requirements covering price oracles, settlement rules, manipulation, conflicts of interest and trading by market deployers.
The filing also suggests safeguards such as leverage and position limits and instrument-specific risk disclosures if regulators eventually allow broader access.
Part of SEC’s broader IPO review
The submission follows SEC Chairman Paul Atkins’ broader IPO modernisation initiative.
Atkins has previously discussed changes to disclosure requirements and other rules intended to make public markets more accessible to companies.
His comments in May also highlighted coordination between the SEC and CFTC on areas involving digital assets and derivatives.
The latest filing brings pre-IPO perpetuals into that broader discussion, but it does not indicate that the SEC has endorsed the products or agreed with the arguments made by HPC and trade[XYZ].
U.S. access remains uncertain
For now, IPOPs remain unavailable to U.S. users.
Any potential expansion into the American market would require regulatory decisions on their legal classification, appropriate trading venues, disclosure requirements and investor protections.
The SEC would also need to coordinate with the CFTC because the proposed contracts sit at the intersection of securities and derivatives regulation.
The August 18 submission therefore adds another product-specific question to the agencies’ broader review of perpetual futures and U.S. market structure.
The filing has also drawn mixed reactions on social media. Some users questioned whether the SEC should have a role in overseeing contracts tied to private companies, while others argued that seeking regulatory approval could expose decentralized markets to additional scrutiny.
One user, Jackson Wong, argued that pre-IPO share prices involving private transactions should not fall under SEC oversight and characterized Hyperliquid’s submission as an effort to build retail confidence.
Another user, Alpha Rider, similarly questioned whether seeking regulatory approval would undermine one of DeFi’s defining characteristics.
Whether pre-IPO perpetuals become part of the regulated U.S. market will ultimately depend on how the SEC and CFTC address those outstanding issues.
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