The Hyperliquid Policy Center is urging U.S. regulators to develop a coordinated framework for equity-linked perpetual contracts, contending that clearer rules could bring emerging onchain markets into the regulated financial system.

The policy group recently joined trade, a deployer of perpetual markets on Hyperliquid, in a submission to the Securities and Exchange Commission centered on pre-IPO perpetuals, known as IPOPs. The proposal arrives as regulators examine how traditional securities rules should apply to blockchain-based derivatives.

Regulators Face New Product Questions

At the heart of the matter is how equity-referencing perpetuals should be classified. The groups argue that the SEC and the Commodity Futures Trading Commission should determine whether these instruments qualify as security futures or security-based swaps.

That distinction has regulatory history behind it. Congress lifted a long-standing ban on single-stock futures — products that sit under joint SEC-CFTC oversight — through the Commodity Futures Modernization Act of 2000, while the Dodd-Frank Act of 2010 placed security-based swaps under SEC jurisdiction with their own registration, clearing and trading rules. How equity-referencing perpetuals are categorized would therefore affect registration, trading venues, clearing, margin requirements and other compliance obligations. The groups also called for rules covering disclosure, listing standards, leverage, position limits and market manipulation.

The proposal draws a distinction between IPOPs and traditional stock ownership. Holders would receive price exposure but would not own shares or receive voting, allocation or issuer rights. Today, exposure to private companies is largely limited to employees, existing investors and accredited participants trading on private secondary platforms, because resale of unregistered shares is restricted under U.S. securities law.

The groups argue that this structure could create a public price-discovery mechanism before companies enter public markets. That, in turn, could give issuers and underwriters another source of information when setting IPO price ranges.

Onchain Markets Seek a U.S. Regulatory Path

The push reflects a broader campaign by the Hyperliquid Policy Center to establish a domestic regulatory pathway for onchain derivatives. The organization describes itself as an independent research and advocacy group focused on perpetual derivatives and financial infrastructure.

Perpetual contracts — futures with no expiry date that tether their price to an underlying asset through funding-rate payments — originated in crypto markets, where BitMEX introduced the first bitcoin perpetual swap in 2016. The product became a staple of offshore crypto derivatives venues before platforms like Hyperliquid carried it onto public blockchains.

The group has also engaged with the CFTC over rules for decentralized and non-custodial trading infrastructure. In separate policy work, it has argued that regulators should adapt rules designed for traditional intermediaries to account for blockchain-based markets.

The regulatory question is becoming more significant as Hyperliquid expands beyond crypto assets. Its permissionless market framework supports perpetual contracts referencing equities, commodities, foreign exchange and other assets.

For regulators, the challenge is balancing innovation with investor protection and market integrity. A coordinated SEC-CFTC approach could provide greater certainty, but the agencies have yet to endorse the proposed framework. The near-term signal to watch is procedural: whether either agency formally responds to the submission or takes up the classification question as part of its broader review of digital-asset market structure. The proposals therefore mark an early step in a larger debate over whether equity derivatives can move onto public blockchains while remaining within the U.S. regulatory perimeter.

Source: CryptoMeter.io