Hyperliquid Labs Engages CFTC on 24/7 Trading and DeFi

On May 23, 2025, Hyperliquid Labs submitted two comment letters to the United States’ CFTC. The documents responded to official requests for feedback on perpetual derivatives and 24/7 trading operations. Hyperliquid portrayed its involvement as part of advancing decentralized finance principles industry-wide. Hyperliquid said this step supports transparency and efficiency in emerging digital finance networks. The announcement highlighted Hyperliquid’s aim to shape practical rules for on-chain markets. This communication followed the resolution of technical issues on the agency’s comment portal recently.

CFTC Aims to Build Trust Through Open Consultation

On May 22, the agency extended its public comment deadline after fixing portal issues. The technical problem had prevented some participants from submitting feedback as intended. Officials then invited stakeholders to share views on perpetual derivatives and 24/7 trading. Respondents could submit comments via email or through the agency’s online platform. The outreach effort aimed to gather insights on evolving digital market structures. This call shows the regulator’s interest in new trading models and risk factors. Many market participants provided data and views to support thoughtful rulemaking. The agency emphasized transparency in this process to build trust with users.

Trading Enabled by Minimal Human Intervention and Automation

Hyperliquid highlighted that the technical architecture supporting constant market operations on-chain relies on real-time price updates. Pre-funded on-chain positions eliminate delays and settlement risks from external transfers. Automated liquidations quickly handle undercollateralized accounts without triggering cascading losses. These features enable secure 24/7 trading with minimal human intervention. Design choices limit single points of failure and enhance overall system reliability. Every transaction, liquidation, and margin update is immutably recorded on-chain. Any participant can verify activity by running a personal node.

The letters also mentioned how network resilience is achieved through Decentralized Finance and a DeFi validator node arrangement. Each node operates independently to maintain continuous uptime despite individual failures. The protocol runs autonomously without requiring constant human monitoring or intervention. Market events such as trades and liquidations remain visible on-chain for accountability. This architecture removes single points of failure common in traditional systems. Real-time open data provides an alternative to centralized reporting models. Observers can track system performance without relying on external audits or third parties. Such transparency fosters user trust and informed decision-making in markets.

Hyperliquid Advocates Principle-Based Regulation to the CFTC

Hyperliquid detailed benefits of on-chain perpetual derivatives for market participants. The firm noted transparency as blockchains allow real-time and public record verification. Its modular design lets developers integrate derivatives into diverse financial tools. Users retain control of funds through self-custody without need for intermediaries. This structure lowers counterparty risks often seen in centralized exchanges. Hyperliquid argued that these features support resilient market dynamics and user empowerment. It emphasized on-chain risk controls over rigid rules or definitions. According to Hyperliquid, flexibility in oversight adapts to changing industry needs.

Hyperliquid urged the CFTC to adopt principle-based regulation frameworks. The firm suggested that rules focus on actual risks and instrument behaviors. Such an approach balances innovation encouragement with vital consumer safeguards. Hyperliquid emphasized that dynamic markets require adaptable oversight models industry-wide. This method could help regulators address emerging digital finance challenges. The proposal aimed to prevent rigid definitions from hindering market evolution. Recently, stakeholders have often recommended risk-based measures over static classification systems. Hyperliquid called for ongoing dialogue between industry participants and regulators. They argued this setup fosters a healthier, more reliable financial ecosystem overall.

Helping to Shape Balanced U.S. Crypto Regulations

Hyperliquid Labs positioned itself as a cooperative partner in evolving market discussions. It underscored how its blockchain offers real-world examples of decentralized finance applications. The comments shared insights on perpetual derivatives implementation and risk management strategies. They also showcased models for secure 24/7 trading and operational resilience. The feedback aimed to assist the United States’ CFTC in crafting balanced rules. Such collaboration may help regulators shape frameworks that enable innovation responsibly. It offers a blueprint for future rulemaking in complex digital finance environments.