Hyperliquid pushes CFTC to greenlight regulated, 24/7 energy perpetuals Hyperliquid Policy Center and trade[XYZ] have asked the Commodity Futures Trading Commission to allow regulated perpetual contracts tied to WTI, Brent and Henry Hub natural gas — arguing that onchain markets already demonstrate demand, liquidity and operational readiness for round‑the‑clock trading. What they filed - In a joint submission dated Aug. 26 responding to the CFTC’s review, the groups urged the agency to create a legal path for perpetual contracts referencing West Texas Intermediate, Brent and Henry Hub, without waiting for new legislation. - trade[XYZ], the first major third‑party market deployer on Hyperliquid, has offered energy perpetuals since October 2025 and — the filing cites Bloomberg — its markets have generated more than $500 billion in cumulative trading volume across asset classes, including energy products. Why perpetuals - Perpetuals are non‑expiring contracts that use recurring funding payments to track an underlying price, letting traders hold continuous exposure without rolling into new delivery months. Hyperliquid and trade[XYZ] say this is especially valuable when traditional futures venues are closed for weekends or holidays. Real‑world test: market stress and onchain pricing - The groups point to the Feb. 28 Middle East conflict that disrupted energy exports: U.S. futures markets were closed until Sunday evening, but oil‑linked perpetuals on Hyperliquid continued trading through the weekend. The filing says about two‑thirds of the oil price move between Friday’s close and the benchmark’s Sunday reopening already occurred in the onchain market. Brent later approached $120/bbl by March 9, and jet fuel prices doubled within weeks, the filing notes citing news reports. - Hyperliquid Policy Center research compared perpetual prices against later benchmark reopenings and found that in nearly 75% of weekend closures studied, the perpetual finished closer to Sunday’s opening price than the benchmark’s prior Friday close. They also reported no statistically measurable decline in the quality of CME WTI reopening prices after trade[XYZ] launched its crude contract — using this to argue perpetuals can coexist with dated futures without weakening benchmarks. Who benefits and market structure points - Dated futures remain necessary for physical settlement, month‑specific exposure, and curve strategies; perpetuals could serve participants who want continuous, straightforward price exposure without frequent roll costs. - Contract size matters: a standard CME WTI futures contract covers 1,000 barrels (roughly $70,000 notional at recent prices), while trade[XYZ]’s median off‑hours crude trade was about $1,300 — a potential access advantage for smaller participants. Regulatory context and precedents - The CFTC opened a public request for comments in June on extending energy futures to continuous trading and listing perpetuals tied to physical/storable energy commodities. The agency’s review covers reference‑price reliability, manipulation risks, surveillance, position limits, margin, clearing, customer protections and potential effects on physical markets. The comment deadline was extended to Aug. 26 after additional questions and requests for time. - CFTC Chair Michael Selig has said regulators need a “clear, data‑driven record.” The commission has not approved energy perpetuals; public comments don’t guarantee authorization. - There is precedent in crypto: in May the CFTC approved Kalshi’s Bitcoin perpetual as a federally regulated contract, though that approval was limited to similarly structured products referencing digital commodities with deep, continuously active spot markets. Hyperliquid and trade[XYZ] argue energy requires separate consideration because of physical delivery systems and different benchmark mechanics. What Hyperliquid and trade[XYZ] want - A technology‑neutral framework that lets exchanges and clearinghouses demonstrate compliance with existing CFTC core principles instead of prescribing a single market structure. - Permission for regulated operators to run trading, margin checks, clearing, settlement and surveillance around the clock using onchain systems that, they say, already support those functions. Under trade[XYZ]’s model positions are pre‑funded and margin is recalculated with each transaction; the filing notes standard order‑book liquidations handled 97.9% of notional volume liquidated on trade[XYZ]. - Recognition that blockchain‑based collateral (eligible stablecoins and tokenized assets) can enable continuous settlement when bank rails are closed. They asked for clarity on how the CFTC’s existing crypto collateral pilot — which allows certain FCMs to accept Bitcoin, Ether and qualifying stablecoins under strict controls — would apply to energy markets. The proposal explicitly does not seek crypto collateral for uncleared swaps. - Plain‑language disclosures on funding payments and liquidation processes, leverage limits by asset class, and market‑integrity measures addressing manipulation and benchmark reliability during physical‑market downtime. - Clarification on CFTC rules that reference conventional “business day” deadlines if exchanges, clearinghouses and collateral networks operate 24/7. The filing’s final request: permit onchain infrastructure for execution, margin, clearing, settlement and recordkeeping whenever those systems meet CFTC core principles. Wider industry moves - The filing follows other industry experiments: in May, Intercontinental Exchange licensed Brent and WTI prices to OKX for perpetuals in selected markets outside the U.S., showing established operators are exploring continuous energy products. In July, Hyperliquid and trade[XYZ] prices were added to TradingView, making onchain energy, equities, FX and crypto markets easier to monitor outside standard hours. What’s next - The CFTC will weigh the public record and data it receives. Hyperliquid Policy Center has also separately petitioned the agencies for an equities framework treating qualifying equity perpetuals as security futures (submitted Aug. 24). For energy perpetuals, the debate will hinge on whether onchain systems can meet the agency’s surveillance, clearing, margin and customer‑protection standards — and whether regulators are comfortable reconciling continuous markets with physical‑market realities. Read more AI-generated news on: undefined/news