Hyperliquid CEO Jeff Yan Tells Bloomberg's Odd Lots US Regulators Should Oversee Market Operators, Not the Blockchain

Since President Trump said on Aug. 19 that CFTC Chair Michael Selig was working to bring Hyperliquid into US markets "in a fully legal way," the company has been laying out how that could work. On Thursday, Oct. 15, its CEO gave the clearest version yet.

Jeff Yan, co-founder of Hyperliquid Labs, appeared on Bloomberg's Odd Lots podcast. He argued that US regulators should target the financial firms that run markets on Hyperliquid's Layer-1 blockchain rather than the blockchain underneath them.

"The regulation sits at the layer where there are controls, and indeed the deployers are the ones that exercise these controls," Yan told Bloomberg.

The internet analogy

Yan's comparison is to internet infrastructure. Nobody asks the protocols that carry web traffic to register as a bank. The bank running a service on top of them carries the compliance burden.

He also cited Amazon Web Services, which supplies computing resources to companies without replacing their products. In his framing, Hyperliquid is the plumbing and the licensed operators building on it answer to regulators.

Yan also pitched Hyperliquid as a partner to traditional finance. "We're not trying to displace anything," he said. "In fact, I think the technology can benefit everyone who currently operates markets in a more traditional setting."

He acknowledged that US regulators are moving cautiously. He described the existing financial system as one that serves many people and has built-in safeguards, and said regulators want to embrace innovation while carrying a high level of responsibility.

What exists today

Hyperliquid is a decentralized exchange for perpetual futures, which are leveraged derivative contracts with no expiry date. Its terms of use bar US persons from its interface, and its flagship platform remains closed to US customers.

The proposal is Yan's preferred reading of how existing financial rules should apply to decentralized infrastructure. It is not an announced regulatory change.

The structure leans on a mechanism Hyperliquid already has. Under its HIP-3 framework, anyone who deploys a market on the network must stake 500,000 HYPE tokens for at least 183 days. That lets third parties stand up their own markets, and those deployers are the ones Yan wants regulators to hold accountable.

The Payward test case

On Sept. 16, Payward, the parent company of Kraken, announced plans to offer permissioned perpetual futures tied to Hyperliquid markets to eligible US clients. Payward said the listings remain subject to regulatory approval.

The plan splits the work among CFTC-registered entities:

• Bitnomial Exchange, a designated contract market, would list the contracts.
• Bitnomial Clearinghouse, a derivatives clearing organization, would clear them.
• NinjaTrader Clearing, a futures commission merchant, would hold client accounts.

Users would not get direct access to the main Hyperliquid platform. The arrangement includes an optional permissioned-market structure known as HIP-3*.

That is close to the model Yan describes. Regulated US firms handle onboarding, clearing and permissions, and Hyperliquid's markets supply the underlying activity.

Groundwork already laid

Hyperliquid has been preparing for this conversation for months. In February, the Hyperliquid Policy Center was funded with 1 million HYPE to engage regulators including the CFTC and the SEC.

In July, the Policy Center and wallet company Phantom urged the CFTC to distinguish software development from regulated financial intermediation. They argued that publishing neutral blockchain software should not by itself require registration as a derivatives exchange, clearinghouse or broker.

Yan is not a neutral party here. He runs the company that would avoid exchange-level obligations if regulators accept his framing.

The open question

The CFTC already knows how to supervise exchanges, clearing organizations and futures commission merchants. Yan's model asks it to apply those same tools to the firms plugging into Hyperliquid.

The approach depends on regulators agreeing to the separation. Authorities would still have to decide which entities exercise enough control over a market to carry legal obligations. Yan's argument is that deployers do. No regulator has said whether it agrees.

The next concrete step is the regulatory approval Payward says its Hyperliquid-linked listings still need. That outcome will show whether the CFTC is willing to treat the operator, not the chain, as the regulated layer.