Hyperliquid Policy Center and market operator trade[XYZ] have asked the U.S. Commodity Futures Trading Commission to allow regulated perpetual contracts tied to WTI crude, Brent crude and Henry Hub natural gas — arguing these 24/7 onchain markets can coexist with traditional futures and improve access and price discovery outside normal exchange hours. What they filed - In a joint submission dated Aug. 26, the groups responded to a CFTC review and asked the agency to establish a legal path for energy perpetuals without waiting for new legislation. - trade[XYZ], the first major third‑party market deployer on Hyperliquid, has offered perpetual energy products since October 2025. The filing cites Bloomberg data saying trade[XYZ]’s markets have generated more than $500 billion in cumulative trading volume across asset classes, including energy. - The proposal urges a technology‑neutral regulatory framework: exchanges and clearinghouses could operate continuous markets so long as they meet existing CFTC core principles for market integrity, customer protection, clearing and recordkeeping. Why perpetuals — and the evidence offered - Perpetual contracts never expire; instead traders pay or receive recurring funding to keep contract prices aligned with the underlying reference. That allows continuous exposure without rolling into a new delivery month. - The submission emphasizes access during off‑hours. After the Feb. 28 Middle East conflict disrupted energy exports, U.S. futures venues were closed until Sunday evening — but oil‑linked perpetuals on Hyperliquid continued to trade over the weekend. The filing says roughly two‑thirds of the oil price move that occurred between Friday close and the benchmark’s Sunday reopening was already reflected in the onchain market. - The filing cites subsequent market moves: Brent approached $120/barrel by March 9 and jet fuel prices doubled within weeks, per news reports. - Hyperliquid Policy Center research compared perpetual prices with the benchmark’s reopening: in nearly 75% of weekend closures studied, the perpetual ended closer to Sunday’s opening price than the benchmark’s prior Friday close. - The filing also reports no statistically measurable deterioration in the quality of CME WTI reopening prices after trade[XYZ] launched its crude contract, using that to argue perpetuals can trade alongside dated futures without weakening established benchmarks. Practical access and market structure points - Contract size matters for access: a standard CME WTI futures contract covers 1,000 barrels (roughly $70,000 notional at recent prices), while the median off‑hours crude trade on trade[XYZ] was about $1,300 — suggesting perpetuals can provide smaller market participants with meaningful ability to hedge or adjust positions out of hours. - The filing acknowledges that traditional dated futures will remain necessary for participants needing physical settlement, exposure to a specific delivery month, or positions tied to the futures curve. Risk controls, surveillance and onchain mechanics - Hyperliquid and trade[XYZ] argue that onchain systems can run trading, margin checks, clearing, settlement and surveillance 24/7. Under trade[XYZ]’s model, positions are pre‑funded and margin is recalculated with each transaction rather than waiting for scheduled settlement. - The filings say standard order‑book liquidations handled 97.9% of all notional volume liquidated across trade[XYZ] markets; predefined backstops covered the rest. - Because transactions, margin changes and liquidations are visible on a public ledger, the groups contend regulated operators could perform real‑time surveillance without adding new reporting burdens for each participant — though U.S. operators would still have to meet all applicable integrity, customer protection and recordkeeping rules. - In July, TradingView integrated Hyperliquid and trade[XYZ] price feeds, making these onchain market prices visible to a broader set of users outside standard exchange hours. Collateral, leverage and other regulatory asks - The filing requests that the CFTC recognize eligible stablecoins and tokenized traditional assets as margin for cleared derivatives, noting blockchain collateral can move while bank rails are closed. - The groups point to the CFTC’s crypto collateral pilot — which already allows some futures commission merchants to accept Bitcoin, Ether and qualifying stablecoins under reporting, capital and risk‑management rules — and ask the commission to clarify how similar treatment would apply to energy markets. They do not seek crypto collateral for uncleared swaps. - Other recommendations include leverage limits tailored by asset class, plain‑language disclosures explaining funding payments and liquidation processes, and market‑integrity standards addressing manipulation risk and reference‑price reliability when physical markets are inactive. - They also ask the CFTC to clarify how rules that reference “business day” deadlines should apply when an exchange, clearing system and collateral network operate nights, weekends and holidays. Regulatory context and next steps - The CFTC opened a public consultation in June on two linked topics: extending standard energy futures to continuous trading and listing perpetual contracts tied to physical or storable energy commodities. The review covers reference‑price reliability, manipulation risks, surveillance, position limits, margin, clearing, customer safeguards and effects on physical energy markets. The comment deadline was extended to Aug. 26. - CFTC Chair Michael Selig has said the agency needs a “clear, data‑driven record” as regulated entities consider longer trading hours and new contract designs. The commission has not approved energy perpetuals and the public consultation does not guarantee authorization. - The filing arrives against a backdrop of industry moves: in May, Intercontinental Exchange agreed to license its Brent and WTI prices for perpetual contracts offered by OKX in selected markets outside the U.S. And in May the CFTC approved Kalshi’s Bitcoin perpetual — the first federally regulated non‑expiring contract in the U.S. — although the agency treated that product as a futures contract and limited its analysis to digital commodities with deep, continuous spot markets. Energy products require separate consideration because of different physical markets, delivery systems and benchmarks. Other parallel filings - Hyperliquid Policy Center has also been pressing for an equity framework. In an Aug. 24 submission it argued that qualifying equity perpetuals should be treated as security futures when they carry established futures features. Why it matters If the CFTC adopts a framework that allows regulated energy perpetuals, it could open round‑the‑clock access to energy price exposure for smaller participants and improve off‑hours price discovery — while forcing exchanges, clearinghouses and regulators to adapt rules and supervision to continuous, onchain trading and settlement models. The agency’s next steps will determine whether and how perpetuals become a regulated feature of U.S. energy markets. Read more AI-generated news on: undefined/news