Hyperliquid co-founder Jeff Yan has set out a regulatory model in which US compliance obligations would fall on the financial firms that run markets on Hyperliquid’s blockchain, rather than on the network itself. His remarks come as US regulators work out how to bring offshore crypto trading venues into the domestic financial system.
Yan laid out the approach in an interview on Bloomberg’s Odd Lots podcast released on October 15, 2026. Bloomberg reported that the distinction would allow Hyperliquid to extend its reach into Wall Street without taking on the full compliance burden of a traditional exchange.
Hyperliquid is a decentralized exchange (DEX) for perpetual futures that runs on its own Layer 1 (L1) blockchain. Perpetual futures, often called perps, are derivative contracts that let traders take leveraged positions on an asset’s price without an expiry date. Yan is the Chief Executive Officer (CEO) and co-founder of Hyperliquid Labs, the main developer of the protocol.
Who Should Carry the Compliance Burden
Yan’s argument separates the blockchain, which matches and records trades, from the businesses that list and operate markets on it. Under his model, a regulated firm that deploys a market on Hyperliquid would handle obligations such as customer onboarding, surveillance and reporting, while the underlying network would not be treated as an exchange.
In the episode, Yan also discussed what would need to happen before Hyperliquid can operate in the United States. The platform currently runs outside the country, and its terms of use bar US persons from accessing its interface.
A Model Already Being Tested by Kraken’s Parent
A version of this structure is already on the table. On September 16, 2026, Payward, the parent company of crypto exchange Kraken, announced plans to offer onchain perpetual futures to US clients, starting with Hyperliquid markets.
Under the proposal, Bitnomial Exchange, a Commodity Futures Trading Commission (CFTC) regulated designated contract market (DCM), would list the contracts, while Bitnomial Clearinghouse, a CFTC-registered derivatives clearing organization (DCO), would clear them. NinjaTrader Clearing, a CFTC-registered futures commission merchant (FCM), would hold client accounts. Payward said the listings remain subject to regulatory approval. The Crypto Times earlier reported on the Payward and Bitnomial plan when it was first unveiled.
The markets would be built through HIP-3, short for Hyperliquid Improvement Proposal 3, which lets outside builders deploy their own perpetual markets on Hyperliquid. According to Hyperliquid’s HIP-3 documentation, each deployer must stake 500,000 HYPE, the network’s native token, and keep that stake for at least 183 days after launching a market. Hyperliquid has also added support for permissioned markets with allowlists, so that a deployer can limit trading to approved accounts.
Washington’s Push to Bring Offshore Trading Home
The regulatory backdrop has shifted quickly this year. On May 29, 2026, the CFTC approved a Bitcoin perpetual contract listed by KalshiEX, the first such approval on a US-regulated exchange.
On August 19, 2026, President Donald Trump said during remarks at the White House that CFTC Chairman Michael Selig was working to bring Hyperliquid into the United States in a fully compliant and legal fashion. Days later, Hyperliquid was reported to be in talks with Bitnomial over a route into the US market.
On October 5, 2026, the CFTC released an advance notice of proposed rulemaking (ANPRM) on two frameworks: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). Regulation CAM would create a crypto asset market (CAM), a new subcategory of DCM registration built for leveraged, margined, or financed retail crypto trading. The notice was published in the Federal Register on October 13, opening a 60-day public comment period.
In an op-ed published the same day as the notice, Selig wrote that the proposed rules would not require crypto assets to trade on CFTC-registered platforms. He described them instead as an optional federal path for exchanges that want to operate under a single market regulator.
Pushback From Traditional Exchanges
Hyperliquid’s rise has drawn resistance from incumbent derivatives venues. CME Group has challenged the CFTC in court over its perpetual futures approvals, and Hyperliquid’s Washington advocacy arm has hired former US Solicitor General Elizabeth Prelogar to respond to that suit. The same group, the Hyperliquid Policy Center, has separately urged the SEC and CFTC to adopt a joint rulebook for perpetual contracts.
What Comes Next
Yan’s proposal is a position, not a rule. Whether US regulators accept a split between protocol and operator will depend on how the CFTC finalizes Regulation CAM after the comment period, and on whether it approves Payward’s Hyperliquid-based listings. Until then, Hyperliquid’s own trading interface remains closed to US users, and any regulated US access would run through registered intermediaries such as Bitnomial.
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