Hyperliquid's Jeff Yan argues U.S. oversight should target platform operators, not the blockchain
Key points
- Hyperliquid founder Jeff Yan told Bloomberg on 15 October that U.S. regulation should apply to firms operating on the blockchain, not to the blockchain network itself.
- Kraken's parent company, Payward, plans to offer U.S. investors derivatives built on Hyperliquid's technology via a regulated exchange, even as Hyperliquid's own perpetual futures market remains closed to U.S. customers.
- Yan's proposed framework would allow Wall Street firms to build regulated trading businesses on Hyperliquid without requiring the blockchain to register as an exchange.
- President Trump stated in August that the CFTC was working to bring Hyperliquid under federal regulations, providing the political backdrop to Yan's public comments.
- If regulators accept the operator-layer argument, Hyperliquid could gain CFTC-regulated participants without altering the protocol's own registration status, setting a precedent for how blockchain infrastructure is treated under U.S. financial law.
Hyperliquid founder Jeff Yan has publicly stated that U.S. regulatory requirements should fall on financial firms deploying trading businesses atop his blockchain, rather than on the network itself. Speaking to Bloomberg on 15 October, Yan drew an analogy to internet infrastructure: the regulated entity should be the operator exercising controls, not the underlying protocol. His formulation, if accepted by regulators, would allow Wall Street firms to build compliant trading venues on Hyperliquid without triggering any obligation for the blockchain to register as an exchange.
The comments carry immediate commercial context. Kraken’s parent company, Payward, has announced plans to offer U.S. investors derivatives using Hyperliquid’s technology through a regulated exchange, even though Hyperliquid’s own perpetual futures market remains closed to U.S. customers. That arrangement would introduce a Commodity Futures Trading Commission (CFTC) regulated operator into the Hyperliquid ecosystem while leaving the underlying protocol outside direct federal oversight. Yan’s framing appears designed to normalise precisely that structure.
The backdrop is presidential. President Donald Trump stated in August that the CFTC was working to bring Hyperliquid under federal regulations, which gives Yan’s public positioning the character of a pre-emptive argument to regulators about where the regulatory perimeter should sit. Whether the CFTC accepts the operator-layer thesis rather than asserting jurisdiction over the network itself is the question that will determine how much of the traditional financial sector can realistically build on Hyperliquid infrastructure under a U.S. regulatory umbrella.