When you open a leveraged position and it gets liquidated, one question matters more than all the others: who was responsible for the market you were trading on? This Thursday, the founder of Hyperliquid offered an answer for the United States: regulate those who deploy markets on the blockchain, not the blockchain itself. The debate may seem technical, but it determines who might one day have to answer to you.
📋 The facts (CoinDesk, Bloomberg Odd Lots, CFTC)
• In an interview on Bloomberg’s Odd Lots podcast, reported by CoinDesk on October 15, 2026, Jeff Yan, co-founder and head of Hyperliquid Labs, explained: “Regulation applies at the layer where controls exist, and it’s the deployers who exercise those controls.”
• His analogy: we regulate companies that use the internet, not the internet itself. He says he wants to provide trading technology to Wall Street institutions, not replace them.
• Hyperliquid's trading interface remains closed to U.S. customers.
• According to CoinDesk, Payward, Kraken's parent company, plans to offer U.S. investors derivatives using Hyperliquid technology through a regulated platform. Hyperliquid could therefore have an operator regulated by the CFTC (the U.S. derivatives regulator), while its own market remains inaccessible to Americans.
• Context: in August, President Trump said the CFTC was working to bring Hyperliquid within the U.S. legal framework.
• On October 5, the CFTC published an advance notice of proposed rulemaking (published in the Federal Register on October 13) with two parts: “Regulation CTX,” for retail crypto transactions involving leverage, margin, or financing, and “Regulation CAM,” a regulated-market subcategory tailored to crypto markets.
• CFTC Chair Michael Selig clarified that these rules “would not require” crypto to be traded on CFTC-registered platforms: this is an optional federal pathway. Platforms that chose it could offer leveraged trading to retail customers, which state-licensed platforms cannot do.
• Public comments are open until December 14, 2026 (National Law Review, Greenberg Traurig, Oct. 14).
• Note: Jeff Yan's proposal is a point of view. It is neither an exemption that has been granted nor an adopted rule.
🧠 The mechanism, simply explained
A “perp” (perpetual contract) is a bet on the price of a crypto asset, such as $BTC, with no end date. Leverage multiplies your stake: with 10x leverage, a 10% drop can wipe out your entire stake. This is called liquidation.
On a traditional platform, one company does everything: it onboards customers, chooses the products, sets the maximum leverage, and handles liquidations. It's clear who to regulate.
Hyperliquid is divided into layers. At the bottom is the blockchain: a public ledger that records and executes orders. Above it are “deployers”: companies that launch a market, choose its rules, and offer it to their customers through their app.
Jeff Yan's argument: the deployer sets the rules, so it should be the one that gets a license, verifies customers' identities, and protects them. The chain, meanwhile, would be like the road: we regulate taxi drivers, not the asphalt.
And this is where the CFTC proposal becomes important: if it creates an optional “crypto market” category, a company like Payward could operate a regulated market on decentralized technology, without the blockchain itself having to become an exchange.
🌍 Why this matters to you: Fatimata's example
Fatimata sells fabric at the market in Bamako. She doesn't have a recent smartphone, so from time to time she borrows a friend's phone to open a small leveraged bitcoin position on a foreign app someone recommended to her. 5,000 FCFA, sometimes 10,000.
The day her position is liquidated within minutes, she doesn't know who to turn to. Does the app have a license anywhere? Did the blockchain “decide”? Who sets the leverage? Who responds to a complaint?
On paper, the model Jeff Yan advocates offers a clear answer: the app operator is responsible. But there's a catch: if that operator isn't regulated anywhere, or is regulated only in a distant country that protects only its own residents, Fatimata is protected by no one. A U.S. license primarily protects U.S. customers.
✅ What you can do right now
1. Before trading, look up the exact name of the company behind the app and the country where it is licensed. If you can't find anything, assume that no one is protecting you.
2. Distinguish between the blockchain and the app: the technology may be sound, but the operator could still be unreliable or dishonest.
3. If you use leverage, start as low as possible (2x or 3x), and only put in what you can afford to lose without affecting your household or business budget.
4. Don't trade using someone else's account or phone: if something goes wrong, you won't be able to prove anything.
5. Be wary of WhatsApp groups that promise to “recover” a liquidated position: it's almost always a scam.
⚖️ The nuance
On the one hand, the idea makes sense: we don't require the internet to have a banking license. And it could let regulated players build on open rails, with greater transparency than a closed system.
On the other hand, the line between “neutral infrastructure” and “operator” isn't always clear: someone writes the code, chooses the price sources, and may be able to change the parameters. Regulators will want to know who really controls what. And nothing has been decided: the CFTC is only at the advance-notice stage, comments are open until December 14, and the final text could change significantly.
💬 What do you think: who should be responsible when a trader is liquidated—the blockchain or the app that sold them the product? Let us know in the comments.
Not financial advice. Sources: CoinDesk (15 Oct. 2026); Bloomberg Odd Lots, interview with Jeff Yan (15 Oct. 2026, via CoinDesk); CFTC, advance notice of proposed rulemaking for Regulation CTX and CAM (5 Oct., Federal Register 13 Oct.); statement by CFTC Chair Michael Selig; National Law Review / Greenberg Traurig (14 Oct. 2026). #Hyperliquid #CFTC #Régulation #Afrique #Crypto