Hyperliquid and Trade[XYZ] Push CFTC to Onshore $500B Oil Perpetuals Market

The Hyperliquid Policy Center (HPC) and trade[XYZ] on Wednesday jointly filed a comment letter with the Commodity Futures Trading Commission (CFTC), asking the agency to open a regulated path for perpetual contracts referencing physically delivered and storable energy commodities such as crude oil and natural gas.

The submission lands on the final day of the extended public comment window that the CFTC opened in June, following an earlier request for comment on the extension of standard futures contracts to around-the-clock trading and on the potential listing of energy perpetuals. Responses were originally due July 22 before the agency added 30 days for further industry input.

The filing comes from two entities that sit at different points in the perpetual futures stack. HPC is the policy arm advocating for the Hyperliquid ecosystem in Washington, and trade[XYZ] is the first and largest third-party deployer of perpetual markets on Hyperliquid’s HIP-3 framework, operating WTI, Brent, and Henry Hub natural gas contracts that have cumulatively traded more than $500 billion in notional volume since October 2025.

A February weekend that reframed the debate

The joint case leans heavily on what happened between Saturday, February 28, and the following Sunday evening. Regional conflict in the Middle East halted energy exports and disrupted supply chains while U.S. futures markets sat closed. By March 9, Brent had touched nearly $120 per barrel, with the International Energy Agency later describing the disruption as the largest supply shock in the history of global oil markets.

Airlines, refiners, and fund managers with crude exposure had no regulated domestic venue in which to react until CME’s electronic session reopened Sunday evening. Market participants outside the United States, by contrast, were able to use oil-linked perpetual contracts on Hyperliquid to adjust exposure through the weekend. 

According to the joint filing, roughly two-thirds of the total move from Friday’s close to the benchmark’s Sunday reopening had already occurred onchain before conventional markets resumed.

A JPMorgan research note published later that month reported Hyperliquid’s oil perpetual peaked at $1.7 billion in daily volume during the crisis, briefly making it the platform’s third most traded product.

What the letter is asking for

The letter frames energy perpetuals as complementary to, rather than substitutes for, dated futures. Contracts with fixed expiry remain best suited to participants tied to specific delivery months, physical settlement, and term structure, the filing argues. For participants with continuous exposure, a perpetual removes the roll cycle and consolidates liquidity into a single order book.

Contract sizing is also part of the pitch. The benchmark WTI futures contract on the CME trades in 1,000-barrel increments, or roughly $70,000 of notional exposure at recent prices, while the median off-hours trade in trade[XYZ]’s crude oil market runs closer to $1,300.

The joint filing recommends five actions the authors say require no new legislation:

• Adopt a technology-neutral, principles-based framework for evaluating energy perpetuals and 24/7 trading, rather than prescribing particular technologies or organizational structures.
• Reaffirm and build on prior guidance by confirming that exchanges and clearinghouses may operate around the clock where they demonstrate compliance with the CFTC’s Core Principles.
• Clarify how time-bound requirements, including the meaning of “business day,” apply to continuously operating markets.
• Recognize stablecoins and tokenized traditional collateral as eligible margin for cleared derivatives.
• Confirm that regulated markets may use onchain infrastructure for execution, margining, clearing, settlement, and recordkeeping, where the applicable Core Principles are satisfied.

The convergence question, in numbers

The central technical question in the CFTC’s inquiry is whether a contract that never expires can reliably track its reference price. Dated futures converge to spot at expiry, whereas perpetuals rely on a funding rate that pays traders to trade against any deviation.

Data cited in the filing, drawn from HPC’s recently published study titled Perpetual Futures as Complements to Dated Futures, argues that the mechanism has held up in live markets. In nearly 75% of the weekend closures sampled, the crude oil perpetual’s weekend price landed closer to the CME benchmark’s Sunday reopening than the benchmark’s own Friday close. The same study found no statistically significant deterioration in the quality of CME WTI reopenings since the crude oil perpetual launched.

On the risk side, the letter reports that ordinary order book liquidation has resolved 97.9% of all notional volume liquidated across trade[XYZ] markets to date, with pre-specified backstop and tail mechanisms accounting for the remainder.

A regulatory sequence, and a pending lawsuit

The comment fits into a broader agenda the CFTC has been assembling through 2026. In May, the agency approved Kalshi’s Bitcoin perpetual as the first perpetual contract to trade as a futures contract on a U.S. exchange, limited to digital asset underliers. CFTC Chairman Michael Selig, in a contemporaneous statement, said the question was never whether perpetual contract markets would exist but whether they would operate under American oversight.

That order remains contested. In June, CME Group sued the CFTC in the U.S. District Court for the District of Columbia, arguing that perpetuals are swaps under the Dodd-Frank Act rather than futures and that the agency acted arbitrarily in approving them. Any expansion of the framework to energy would layer on top of that unresolved litigation.

A pattern of engagement

Wednesday’s filing is HPC’s third substantive submission to the CFTC in as many months and its second joint filing with trade[XYZ]. Earlier this month, HPC urged the CFTC to continue its phased approach to reviewing perpetual futures. On August 18, HPC and trade[XYZ] jointly submitted a proposal to the SEC on regulated pre-IPO perpetuals. Two days ago, HPC filed a separate letter with both agencies calling for a harmonized taxonomy across perpetual contract classifications.

The Hyperliquid ecosystem has also gained political altitude. Last week, the HYPE token rallied after President Donald Trump said the CFTC was working to bring Hyperliquid to the U.S. in a “fully compliant and legal fashion.”

The analytical read

Two things distinguish this filing from earlier HPC comments. The first is the coalition. By pairing a policy shop with an operating deployer, the authors put a live venue’s data in front of the CFTC rather than a purely theoretical argument, a structure the SEC saw earlier this month in the joint pre-IPO letter.

The second is the timing. The letter arrives after the CFTC’s May Kalshi order but before any resolution of the CME litigation, and it explicitly seeks to reuse the existing Core Principles rather than open a new regulatory chapter. 

That framing narrows the surface area for opposition, but it also concentrates the debate on a smaller set of contested questions: whether stablecoin and tokenized collateral qualify as margin, how position limits apply to a non-expiring contract, and whether a non-manipulable cash price series exists to reference at each funding interval.

Whether crude oil becomes the CFTC’s next test case, or whether the agency defers until the CME case is resolved, will determine how much of the offshore volume documented in the joint filing has a plausible route back onshore. The public record closes on Wednesday.

Also Read: Coinbase Urges SEC, CFTC to Align Rules for Perpetual Derivatives

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