Hyperliquid's Jeff Yan Wants U.S. Rules to Target Market Operators, Not the Blockchain

Published October 16, 2026, 11:12 PKT. Based on Bloomberg's Odd Lots interview with Hyperliquid co-founder Jeff Yan, released October 15, 2026, and reporting from The Crypto Times, ForkLog, Finst, TradersUnion and CryptoCompass.

The co-founder of the world's biggest decentralized perpetual futures exchange has told U.S. regulators where he thinks the law should land, and it is not on his blockchain. Jeff Yan, the chief executive officer and co-founder of Hyperliquid Labs, the main developer behind Hyperliquid, laid out a regulatory model in an interview on Bloomberg's Odd Lots podcast, released on October 15, 2026, in which compliance obligations would fall on the financial firms that run markets on Hyperliquid's blockchain rather than on the network itself, The Crypto Times reported. Under Yan's approach, a regulated company that deploys a market would handle customer onboarding, surveillance and reporting, while the underlying layer-one network would not be treated as an exchange. The distinction, Yan argued, would let Wall Street firms build trading products on Hyperliquid's infrastructure without the blockchain itself having to register as a regulated exchange.

The deployers, not the chain

Yan's argument separates the network, which matches and records trades, from the businesses that list and operate markets on it. "The regulation sits at the layer where there are controls, and indeed the deployers are the ones that exercise these controls," Yan told Bloomberg, comparing Hyperliquid's role to internet infrastructure that regulated financial institutions use to deliver services. He added, "We are not trying to displace anyone. In fact, I think our technology can benefit everyone currently operating markets in a more traditional setting," according to ForkLog's account of the interview. The framing builds on an earlier policy push: in July, the Hyperliquid Policy Center and Phantom urged the Commodity Futures Trading Commission to distinguish publishing neutral blockchain software from regulated financial intermediation, FinanceFeeds reported, arguing that shipping software should not by itself trigger registration as a derivatives exchange, clearinghouse or broker.

The 500,000 HYPE gate

The deployer model Yan describes is not hypothetical; it is how Hyperliquid's permissionless market layer already works. Under HIP-3, short for Hyperliquid Improvement Proposal 3, outside builders can deploy their own perpetual markets on the chain, and each deployer must stake 500,000 HYPE, the network's native token, for at least 183 days after launching a market, according to Hyperliquid's HIP-3 documentation cited by The Crypto Times. Hyperliquid has also added support for permissioned markets with allowlists, so a deployer can restrict trading to approved accounts. Those controls, on-chain staking commitments plus allowlist gating, are exactly the layer where Yan says regulatory obligations should sit.

Payward's September 16 test case

A version of Yan's structure is already on the table. On September 16, 2026, Payward, the parent company of crypto exchange Kraken, announced plans to offer onchain perpetual futures to U.S. clients, starting with Hyperliquid markets, The Crypto Times reported. Under the proposal, Bitnomial Exchange, a CFTC-regulated designated contract market, would list the contracts, Bitnomial Clearinghouse, a CFTC-registered derivatives clearing organization, would clear them, and NinjaTrader Clearing, a CFTC-registered futures commission merchant, would hold client accounts. Payward said the listings remain subject to regulatory approval. The arrangement is the concrete test of Yan's thesis: Hyperliquid's perps technology reaches U.S. investors through registered intermediaries, while the blockchain itself stays out of the exchange-registration question. For now, Hyperliquid's own trading interface remains closed to U.S. customers, and its terms of use bar U.S. persons from accessing it.

The CFTC rulemaking Yan is betting on

The regulatory backdrop has shifted quickly this year. On May 29, 2026, the CFTC approved a Bitcoin perpetual contract listed by KalshiEX, the first such approval on a U.S.-regulated exchange. On August 19, 2026, President Donald Trump said during White House remarks that CFTC Chairman Michael Selig was working to bring Hyperliquid into the United States in a fully compliant and legal fashion, Rollcall reported, and days later Hyperliquid was reported to be in talks with Bitnomial over a U.S. route. On October 5, 2026, the CFTC released an advance notice of proposed rulemaking on two frameworks, Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). Regulation CAM would create a crypto asset market category, a new subcategory of designated contract market registration built for leveraged, margined or financed retail crypto trading. The notice was published in the Federal Register on October 13, opening a 60-day public comment period. In an op-ed published the same day, Selig wrote that the proposed rules would not require crypto assets to trade on CFTC-registered platforms, describing them instead as an optional federal path for exchanges that want to operate under a single market regulator.

The incumbents pushing back

Hyperliquid's rise has drawn resistance from incumbent derivatives venues. CME Group has challenged the CFTC in court over its perpetual futures approvals, and Hyperliquid's Washington advocacy arm has hired former U.S. Solicitor General Elizabeth Prelogar to respond to that suit, The Crypto Times reported. The same group, the Hyperliquid Policy Center, has separately urged the SEC and CFTC to adopt a joint rulebook for perpetual contracts. Whether regulators accept Yan's split between protocol and operator will depend on how the CFTC finalizes Regulation CAM after the comment period, and on whether it approves Payward's Hyperliquid-based listings. Until then, Yan's proposal is a position, not a rule.

This article is news reporting and is not investment advice.

Sources

• Bloomberg, Odd Lots interview with Hyperliquid co-founder and CEO Jeff Yan, episode released October 15, 2026, primary source for Yan's deployer-regulation model, the "regulation sits at the layer where there are controls" quote, the internet-infrastructure comparison, the "not trying to displace anyone" quote, and the argument that regulated operators could use Hyperliquid without the blockchain registering as an exchange
• The Crypto Times, "Hyperliquid Founder Wants US Rules to Target Market Operators, Not Its Blockchain", October 15, 2026, secondary source for the interview summary, the HIP-3 500,000 HYPE stake and 183-day requirement, permissioned-market allowlists, the Payward September 16 announcement details, the Bitnomial DCM/DCO/NinjaTrader FCM structure, the KalshiEX May 29 approval, Trump's August 19 remarks, the October 5 CFTC ANPRM and October 13 Federal Register publication, Selig's op-ed, and the CME lawsuit/Elizabeth Prelogar development
• ForkLog, "Hyperliquid Founder Advocates for Regulation of Operators, Not Platform", October 15, 2026, secondary source for Yan's Bloomberg remarks and the Kraken/Bitnomial U.S. route
• Finst, "Jeff Yan Wants the CFTC to Crack Down on Hyperliquid Deployers", October 15, 2026, secondary source for Yan's operator-responsibility argument and the U.S. regulatory context
• TradersUnion, "Hyperliquid pushes CFTC oversight toward deployers, not blockchain", October 15, 2026, secondary source for the deployer-oversight model and the Payward/Bitnomial regulated route
• CryptoCompass, "Hyperliquid's Jeff Yan Wants US Regulators to Police", October 15, 2026, secondary source for the deployer-vs-blockchain distinction and the allowlist market mechanics
• Hyperliquid HIP-3 documentation via hyperliquid.gitbook.io, referenced for the 500,000 HYPE deployer stake and 183-day lock requirement
• Payward via Businesswire, September 16, 2026, referenced for the planned U.S. onchain perpetuals offering built on Hyperliquid markets
• U.S. Commodity Futures Trading Commission, advance notice of proposed rulemaking on Regulation CTX and Regulation CAM, October 5, 2026, referenced for the proposed crypto asset market framework
• Federal Register, October 13, 2026, referenced for the publication of the CFTC notice and the 60-day public comment period
• FinanceFeeds, referenced for the July Hyperliquid Policy Center and Phantom letter urging the CFTC to distinguish software development from regulated intermediation