The Hyperliquid Policy Center is urging U.S. regulators to create a clearer legal framework for equity perpetual contracts, arguing that qualifying products should be treated as security futures rather than remaining stuck between futures and swaps classifications.
The proposal comes as Hyperliquid’s HIP-3 markets continue to grow rapidly. According to the filing, these markets processed more than $480 billion in cumulative notional trading volume during their first 10 months, while maintaining roughly $4 billion in open interest.
The organization wants the Securities and Exchange Commission and Commodity Futures Trading Commission to adopt a consistent approach that focuses on how a perpetual contract is structured and traded rather than simply on the asset it tracks.
Hyperliquid Policy Center Wants Clear Rules for Equity Perpetuals
In an Aug. 24 comment letter, the Hyperliquid Policy Center argued that cash-settled equity perpetuals with the characteristics of traditional futures contracts should be eligible to operate as security futures.
Security futures already fall under a regulatory framework jointly overseen by the SEC and CFTC, which could provide a clearer path for equity-based perpetual contracts in the United States.
The issue has become increasingly important because perpetual contracts have grown into a major part of global crypto derivatives markets while their legal classification in the United States remains uncertain.
HPC argues that regulators should first examine the structure and trading mechanics of a contract to determine whether it functions like a future or a swap. Only after that should the underlying asset determine how regulatory responsibility is divided.
Under this approach, perpetual contracts linked to Bitcoin, commodities or individual stocks could receive the same basic product classification when their structures are fundamentally similar.
How Perpetual Contracts Work
Unlike traditional futures contracts, perpetual contracts do not have a fixed expiration date.
Instead, they rely on recurring funding payments between long and short traders to keep the contract price close to the value of the underlying asset.
When a perpetual contract trades above its reference price, traders holding long positions generally pay those holding short positions. When it trades below the reference price, short traders pay longs.
HPC argues that this mechanism performs a role similar to expiration and settlement in traditional futures by continuously encouraging the contract price to move toward the underlying market price.
The organization also highlighted several characteristics commonly associated with futures, including standardized contract terms, fungibility, fixed quantities and the ability to close positions through offsetting trades.
On Hyperliquid’s HIP-3 markets, trades are executed through a central limit order book, margin requirements are continuously maintained and prices are publicly available.
Importantly, traders in equity perpetuals gain exposure to the price movement of a stock without actually owning the underlying shares, meaning they do not receive voting rights or other shareholder benefits.
Lack of Expiry Does Not Automatically Rule Out Futures Classification
One of the biggest legal questions is whether a contract without a fixed expiry date can still qualify as a futures contract.
HPC argues that it can.
The group cited previous federal court decisions indicating that a specific future delivery or settlement date is not always required for a contract to possess the characteristics of a future.
U.S. regulators have already applied similar reasoning to at least one crypto product.
In May, the CFTC approved Kalshi’s BTCPERP product as the first federally regulated Bitcoin perpetual futures contract in the United States.
The product has no fixed expiration date, yet the CFTC classified it as a contract for future delivery.
For HPC, that decision provides an important precedent for considering how equity perpetuals could also fit within the futures framework.
SEC and CFTC Have Not Reached a Consistent Position
Despite the growth of perpetual contracts, U.S. regulators have not established a uniform approach to their classification.
According to HPC, some previous CFTC enforcement actions treated perpetual products as swaps, while other cases dealt with them as leveraged or margined retail commodity transactions.
The SEC has also referred to certain products as “perpetual futures” while disputing whether they were actually futures contracts offered under regulated futures rules.
As a result, the basic legal question remains unresolved: should these products be treated as futures, swaps or security-based swaps?
HPC argues that this uncertainty creates unnecessary complexity for exchanges, developers and investors.
The disagreement has also reached the courts.
CME Group has challenged the CFTC’s treatment of products such as Kalshi’s Bitcoin perpetual contract, arguing that they should fall under the swaps framework rather than being classified as ordinary futures.
HIP-3 Trading Volume Strengthens the Debate
Hyperliquid’s HIP-3 framework is an important part of HPC’s argument.
HIP-3 allows independent market operators, known as deployers, to create their own perpetual markets.
The protocol itself handles major infrastructure functions such as trade execution, price-time matching, margin enforcement, funding payments, clearing and settlement.
Deployers can control elements including which assets are listed, oracle sources, leverage limits, contract specifications and open-interest caps.
HIP-3 markets currently provide exposure to several traditional financial asset classes outside the United States, including crude oil, gold and other precious metals, foreign exchange, stock indexes, individual equities and exchange-traded funds.
Over their first 10 months, these markets generated more than $480 billion in notional trading volume.
Across Hyperliquid more broadly, the platform processed nearly $3 trillion in notional volume during 2025 and more than $1.5 trillion through Aug. 23, 2026.
Those numbers show that perpetual contracts are no longer a small or experimental corner of digital asset markets.
Equity Perpetuals Give Price Exposure Without Stock Ownership
Equity-linked perpetual contracts have become an important part of the HIP-3 expansion.
These products allow traders to gain synthetic exposure to the price of individual stocks without purchasing the actual shares.
That means a trader could potentially benefit from the rise or fall of a stock price while receiving none of the legal rights associated with direct ownership.
For example, holders would not receive voting rights, dividends unless specifically replicated by the contract structure, or other shareholder claims.
This distinction is important because it places equity perpetuals firmly within the derivatives discussion rather than treating them as direct stock ownership.
HPC believes that when these products display the same characteristics as futures contracts, they should be regulated accordingly.
U.S. Users Currently Cannot Access Hyperliquid
HPC also pointed out that Hyperliquid is not currently available to U.S. users.
As a result, the significant trading volume and liquidity that developed around HIP-3 perpetual markets has largely grown outside the United States.
The organization argues that clearer domestic regulation could allow similar products to operate through regulated U.S. markets rather than pushing activity abroad.
This has become a recurring theme in the broader U.S. crypto regulatory debate, where companies have often argued that uncertainty encourages innovation and liquidity to move to jurisdictions with clearer legal frameworks.
Security Futures Could Offer a Regulatory Solution
HPC believes the existing security futures framework could provide a practical solution for qualifying equity perpetual contracts.
Security futures are already subject to joint oversight from the SEC and CFTC.
Under the current framework, a designated contract market regulated by the CFTC can list security futures after completing notice registration with the SEC.
Similarly, a national securities exchange can register with the CFTC to offer eligible futures products.
This structure could allow equity perpetuals to enter the U.S. market without requiring regulators to build an entirely new framework from scratch.
Security futures have seen relatively limited activity in the United States in recent years, particularly after OneChicago closed in 2020.
However, interest has started to return. CME Group announced plans in June 2026 to launch single-stock futures, bringing renewed attention to the category.
HPC Wants Consistent Classification Across Asset Types
One of HPC’s main requests is for regulators to apply the same classification principles regardless of the underlying asset.
For example, if a Bitcoin perpetual, crude oil perpetual and stock perpetual all have essentially the same futures-like structure, HPC argues that regulators should initially classify them using the same methodology.
The underlying asset would then determine which agencies have jurisdiction.
A perpetual contract linked to an individual security that qualifies as a future could therefore become a security future and fall under joint SEC and CFTC oversight.
HPC believes this approach would make the regulatory system more predictable while allowing exchanges flexibility in how individual products are designed and listed.
Not Every Perpetual Contract Would Be Treated as a Future
The proposal does not argue that all perpetual contracts should automatically be classified as futures.
HPC said regulators should still have flexibility to classify certain products as swaps or security-based swaps when their characteristics differ significantly from exchange-traded futures.
For example, a bilateral and individually negotiated perpetual-style contract might lack important futures characteristics such as fungibility, offset rights or multilateral execution.
Such a product could reasonably remain within the swaps framework.
The aim is therefore not to create a single classification for every contract labeled “perpetual,” but to establish consistent criteria based on the actual economic and trading characteristics of each product.
Regulators May Not Need to Wait for New Legislation
HPC also argues that the SEC and CFTC may be able to provide greater clarity without waiting for Congress or launching a lengthy formal rulemaking process.
The agencies could issue interpretive guidance, policy statements or staff-level guidance explaining how perpetual contracts should be treated.
They also have joint authority to update security futures listing standards.
According to HPC, regulators have previously used that authority for products including American Depositary Receipts, ETFs, closed-end fund shares and debt securities.
That could potentially provide a faster route toward a workable regulatory framework for equity perpetuals.
What the Proposal Could Mean for U.S. Crypto Derivatives
The Hyperliquid Policy Center’s proposal highlights a larger challenge facing U.S. financial regulators as digital asset markets increasingly adopt products that do not fit neatly into traditional legal categories.
Perpetual contracts have become enormously popular because they give traders continuous leveraged exposure without requiring contracts to expire and roll over.
However, that same structure has made them difficult to place within existing futures and swaps rules.
HPC’s proposed security futures approach could offer a compromise for equity-linked perpetual products by using an existing jointly regulated framework rather than creating an entirely new category.
For traders and exchanges, clearer rules could potentially make regulated U.S. access to these products easier.
For regulators, the challenge will be determining which perpetual contracts genuinely behave like futures and which should remain classified as swaps or other derivatives.
With HIP-3 markets already processing more than $480 billion in their first 10 months, the regulatory question is becoming increasingly difficult to ignore.
