Hyperliquid US Regulation: Jeff Yan Calls for New Rules

• Hyperliquid founder Jeff Yan says US regulators should oversee market operators rather than the underlying blockchain.
• Yan argues that Hyperliquid’s Layer 1 network should be treated as shared financial infrastructure.
• Kraken parent Payward reportedly plans to use Hyperliquid technology for regulated US derivatives trading.

Hyperliquid founder Jeff Yan has called for a different approach to cryptocurrency regulation in the United States, arguing that regulators should focus on companies operating financial markets rather than the blockchain infrastructure supporting them.

Speaking on Bloomberg’s Odd Lots podcast, Yan said Hyperliquid’s Layer 1 blockchain should be viewed as financial infrastructure instead of a traditional cryptocurrency exchange.

Under his proposed approach, regulatory obligations would apply to businesses that create, deploy and control markets operating on the network.

The distinction is important because a blockchain can provide technology used by multiple independent financial services.

Yan’s position suggests that the same underlying infrastructure could support different market operators, each responsible for meeting applicable regulatory requirements.

However, this represents his preferred regulatory framework, not an established US regulatory classification for Hyperliquid.

Hyperliquid Wants to Support Wall Street Institutions

Yan also explained that Hyperliquid aims to provide infrastructure for traditional financial institutions rather than replace them.

The network is designed to support trading activity through a shared blockchain-based system.

In this model, financial firms could potentially build services using Hyperliquid’s technology while retaining responsibility for their own market operations.

Bloomberg reported that Payward, the parent company of Kraken, plans to offer derivatives to US investors using Hyperliquid technology through a regulated exchange.

The reported plan illustrates how blockchain infrastructure could be integrated into traditional financial markets.

However, the arrangement does not mean Hyperliquid itself has received authorization to serve US customers.

Hyperliquid remains unavailable to US users, and Payward’s reported plans should not be interpreted as a change to that restriction.

Details about the timing and structure of the planned derivatives offering remain important for understanding how it would operate.

What Hyperliquid US Regulation Could Mean for DeFi

The debate surrounding Hyperliquid US regulation reflects a broader question facing decentralized finance: who should be responsible when financial services operate on blockchain networks?

Traditional exchanges generally operate under rules governing trading venues and market intermediaries.

Blockchain networks can be structured differently, with infrastructure and market operations potentially handled by separate participants.

Yan argues that oversight should follow the entities exercising actual control over financial markets.

Such an approach could allow institutions to use shared blockchain infrastructure while complying with rules relevant to their activities.

Nevertheless, determining regulatory responsibility can be complicated when developers, operators and users have overlapping roles.

US regulators would ultimately need to assess the specific activities and legal responsibilities involved.

For now, Yan’s message is that Hyperliquid wants to become infrastructure for established financial institutions, not a replacement for Wall Street.

His comments highlight an ongoing discussion about how existing financial regulations should apply to blockchain-based trading systems.