Hyperliquid’s policy arm is pressing U.S. regulators to clear a path for equity perpetual contracts to trade as security futures — arguing that the contracts’ structure and massive trading volumes demand a settled legal framework. What Hyperliquid asked - In an Aug. 24 comment letter to the SEC and CFTC, the Hyperliquid Policy Center (HPC) urged regulators to allow cash-settled equity perpetuals that exhibit futures-like characteristics to be classified as security futures — a product category jointly overseen by the two agencies. - HPC’s filing responds to a joint SEC/CFTC request for public input on how to define swaps, security-based swaps and other emerging derivatives that sit at jurisdictional boundaries. Why it matters Perpetual contracts — popular in crypto and increasingly offered on traditional assets — remain legally ambiguous in the U.S.: are they futures or swaps? That question affects which rules apply, who supervises them, and how exchanges list and operate these products. HPC notes this uncertainty exists even as perpetuals have gone mainstream overseas. HPC’s proposed test HPC suggests a two-step approach for classification: 1) First decide whether a derivative is futures-like or swap-like based on its structure and trading mechanics. 2) Then allocate regulatory authority based on the reference asset (e.g., crypto, commodities, an individual stock). Under that approach, a Bitcoin, crude oil or single-stock perpetual with the same futures-like features would receive the same initial classification. A single-stock perpetual deemed a future would fall into the security futures bucket and therefore be subject to both CFTC and SEC oversight. Why perpetuals can look like futures HPC highlights the core mechanics that make many perpetuals functionally similar to dated futures: - No fixed expiry, but recurring funding payments (longs pay shorts when the perp trades above reference price; shorts pay longs when below) that incentivize price convergence with the underlying market. - Standardization: fungibility, fixed unit quantities, the ability to offset positions — features courts and regulators have used historically to identify futures. - On Hyperliquid’s HIP-3 markets, positions open and close through a central limit order book, margin is maintained continuously, and contract prices are public. Equity perps on HIP-3 give synthetic price exposure without ownership, voting rights, or other shareholder claims. Precedents and regulatory patchwork - The agencies have taken mixed approaches. The CFTC approved Kalshi’s BTCPERP on May 29 as a federally regulated Bitcoin perpetual — treating a no-expiry perp as a futures contract — and Kalshi began offering it in June. - Other CFTC actions and enforcement cases have sometimes treated perpetual-style products as swaps or as retail commodity transactions subject to different rules. - The SEC used the term “perpetual futures” in the Mango Markets enforcement matter while contesting those products’ futures status. - CME Group has challenged the CFTC’s reasoning in court, arguing that some perpetuals should fall under the swaps framework rather than being treated as futures. Real-world trading scale HPC tied its petition to live trading on Hyperliquid’s HIP-3 framework, where independent market operators called deployers create perpetual markets. HIP-3 execution covers order matching, margin enforcement, funding transfers, clearing and settlement, while deployers set assets, contract specs, oracle sources, leverage limits and open-interest caps. Reported activity: - HIP-3 markets processed more than $480 billion in notional trading volume during their first 10 months and maintained roughly $4 billion in open interest (HPC filing). - Across Hyperliquid overall, markets processed nearly $3 trillion in notional volume in 2025 and more than $1.5 trillion in 2026 through Aug. 23. - HIP-3 markets list traditional assets (for non-U.S. users) including crude oil, gold and other precious metals, FX, equity indexes, single stocks and ETFs. U.S. users currently cannot access Hyperliquid’s markets. Regulatory ask and practical steps HPC urged the SEC and CFTC to: - Confirm that cash-settled equity perpetuals with established futures characteristics may be listed as security futures. - Create a consistent taxonomy and update the security futures framework so existing listing standards can accommodate new perpetual structures. - Preserve flexibility so bilateral or bespoke perpetual-style contracts that lack fungibility, multilateral execution or offset rights can still be treated as swaps or security-based swaps. - Use interpretive guidance, policy statements or staff-level guidance — rather than a full rulemaking — to provide clarity quickly. The agencies already have joint authority to modify security futures listing standards and have used that authority previously for products like ADRs, ETFs and debt securities. A dormant-but-ready pathway The security futures avenue is attractive because it already allocates joint SEC/CFTC oversight: a designated contract market can list security futures after notice-registering with the SEC, and a national securities exchange can notice-register with the CFTC. Security futures activity has been limited since OneChicago closed in 2020, but interest is re-emerging — CME announced plans to relaunch single-stock futures starting July 27. What’s next The SEC and CFTC’s review of swaps and related definitions remains open. HPC’s filing adds data and a concrete proposal to the public record, anchored by real trading metrics from HIP-3. Regulators may respond with guidance or policy statements, but the legal question could still be shaped by enforcement outcomes and litigation (e.g., CME’s challenge). For market participants, the stakes are high: the answer will determine how perpetuals are offered, overseen and integrated into U.S. capital markets. 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