Hyperliquid Asks SEC, CFTC to Treat Equity Perpetuals as Security Futures

Hyperliquid's policy arm is urging U.S. regulators to create a clear legal lane for equity perpetual contracts, arguing that their design and growing scale warrant a settled classification. In an Aug. 24 comment letter to the Securities and Exchange Commission and the Commodity Futures Trading Commission, the Hyperliquid Policy Center (HPC) asked the agencies to allow cash-settled equity perpetuals that behave like futures to be categorized as "security futures," a jointly regulated product type. The filing responds to the SEC and CFTC's joint request for public input on how to define swaps, security-based swaps, and other derivatives that sit at the boundary of both agencies' jurisdiction. Perpetuals, long a staple in crypto markets and increasingly offered on traditional assets abroad, remain a gray area in the U.S. Whether they are treated as futures or swaps determines which rules apply, which regulator has authority, and how venues can list and operate these products. HPC proposed a two-step classification framework. First, regulators would decide whether an instrument is "futures-like" or "swap-like" based on structure and trading mechanics. Second, regulatory authority would be assigned based on the reference asset (for example, crypto, commodities, or a single stock). Under that approach, a Bitcoin, crude oil, or single-stock perpetual with the same futures-like features would start from the same initial classification. A single-stock perpetual deemed a future would fall under the security futures regime and be subject to both CFTC and SEC oversight. To support the "futures-like" view, HPC pointed to mechanics common in many perpetuals that mirror dated futures. While perps have no expiry, they typically use recurring funding payments (longs pay shorts when the perp trades above the reference price; shorts pay longs when it trades below) to pull prices toward the underlying market. HPC also highlighted standardization features historically used by courts and regulators to identify futures: fungibility, fixed unit sizes, and the ability to offset positions. HPC cited Hyperliquid's HIP-3 markets, where positions are opened and closed through a central limit order book, margin is monitored continuously, and prices are transparent. Equity perps on HIP-3 provide synthetic exposure without share ownership, voting rights, or other shareholder claims. The policy backdrop remains fragmented. The CFTC approved Kalshi's BTCPERP on May 29 as a federally regulated Bitcoin perpetual, treating a no-expiry perp as a futures contract, and Kalshi began offering it in June. In other actions and enforcement matters, the CFTC has at times viewed perpetual-style products as swaps or as retail commodity transactions subject to different rules. The SEC used the term "perpetual futures" in the Mango Markets enforcement case while disputing that those products were actually futures. CME Group has also challenged the CFTC's reasoning in court, arguing that some perpetuals should be handled under the swaps framework. HPC tied its request to trading activity on HIP-3, where independent market operators known as "deployers" create perpetual markets. HIP-3 handles order matching, margin enforcement, funding transfers, clearing, and settlement, while deployers set the asset, contract specifications, oracle sources, leverage limits, and open interest caps. According to the filing, HIP-3 markets processed more than $480 billion in notional trading volume in their first 10 months and held about $4 billion in open interest. Across Hyperliquid overall, markets reportedly processed nearly $3 trillion in notional volume in 2025 and more than $1.5 trillion in 2026 through Aug. 23. HIP-3 also lists traditional assets for non-U.S. users, including crude oil, gold and other precious metals, FX, equity indexes, single stocks, and ETFs. U.S. users currently cannot access Hyperliquid's markets. HPC asked the agencies to confirm that cash-settled equity perpetuals with established futures characteristics can be listed as security futures, to develop a consistent taxonomy and modernize security futures listing standards to accommodate new perpetual designs, and to preserve room for bilateral or bespoke perpetual-style contracts that lack fungibility, multilateral execution, or offset rights to remain treated as swaps or security-based swaps. HPC also urged the SEC and CFTC to move quickly via interpretive guidance, policy statements, or staff-level guidance rather than full rulemaking. HPC argued that the security futures pathway is available today because it already assigns joint SEC/CFTC oversight. A designated contract market can list security futures after notice-registering with the SEC, and a national securities exchange can notice-register with the CFTC. While activity in security futures has been limited since OneChicago shut down in 2020, interest has started to return; CME has announced plans to relaunch single-stock futures beginning July 27. The SEC and CFTC review of swaps and related definitions remains open. HPC's submission adds a concrete framework and market-scale data to the record, though outcomes could still be shaped by enforcement actions and litigation, including CME's challenge. For market participants, the classification decision will influence how perpetuals are listed, supervised, and integrated into U.S. capital markets.