Hyperliquid urges SEC and CFTC to treat some equity perpetuals as security futures

A classification question regulators have not settled

Hyperliquid Policy Center framed the issue as a threshold product-classification question rather than a request for a new asset-specific regime. Its proposed approach would first examine a derivative’s structure and trading characteristics to decide whether it is a future or a swap, with the referenced asset then determining which regulator, or regulators, oversee it.

Under that logic, a perpetual contract tied to Bitcoin, crude oil or a single stock should receive the same initial classification if each instrument has the same futures-like design. If the underlying reference is an individual stock and the contract qualifies as a future, Hyperliquid said it should fall into the security futures category, which is jointly overseen by the SEC and CFTC.

Why Hyperliquid says perpetuals can qualify as futures

At the center of the argument is the structure of perpetual contracts. Unlike dated futures, they do not expire on a set date. Instead, recurring funding payments are used to keep the contract price close to the referenced asset. When the contract trades above the reference price, longs pay shorts; when it trades below, shorts pay longs. Hyperliquid said this creates a continuous incentive for prices to converge, serving a role similar to expiration and final settlement in traditional futures.

The filing also pointed to traits that courts and regulators have historically considered when evaluating futures contracts, including standardized terms, fungibility, fixed unit quantities and the ability to exit through an offsetting trade. On Hyperliquid’s HIP-3 markets, positions are opened and closed on a central limit order book, margin is maintained continuously and prices are publicly observable. Holders of equity perpetuals get price exposure, Hyperliquid said, but not share ownership, voting rights or other claims on the referenced stock.

Hyperliquid further argued that the absence of an expiry date does not automatically prevent futures treatment. It cited prior federal court decisions saying a specific delivery or settlement date is not always required for a contract to have the futurity associated with futures.

Past cases have produced mixed signals

According to the filing, prior U.S. enforcement actions did not establish a uniform answer for perpetual contracts. Hyperliquid said some earlier CFTC matters analyzed perpetual products under portions of the Commodity Exchange Act’s swap definition without first deciding whether those instruments qualified for the statutory exclusion for futures contracts. Other actions treated perpetual-style products as leveraged or margined retail commodity transactions subject to futures-like requirements.

The SEC has also used the term “perpetual futures” in litigation tied to the Mango Markets exploit while disputing that the products were offered under regulated futures rules. Hyperliquid said neither those enforcement cases nor court decisions resolved the threshold question of whether the instruments themselves qualify as futures or security futures excluded from the swap definition.

The filing contrasted that record with the CFTC’s May approval of Kalshi’s BTCPERP, which was classified as a futures contract despite lacking a fixed expiration date. The CFTC at the time said perpetuals tied to other asset classes would require further review and specifically identified equity-based products as an area where both the CFTC and SEC should be involved.

HIP-3 activity and the proposed path forward

Hyperliquid linked the policy debate to activity already taking place outside the United States through its HIP-3 framework, where independent deployers can create perpetual markets. The protocol handles execution, matching, margin enforcement, funding transfers, clearing and settlement, while deployers set items such as listed assets, contract terms, oracle sources, leverage limits and open-interest caps.

The filing said HIP-3 markets span crude oil, gold and other precious metals, foreign exchange, equity indexes, individual equities and exchange-traded funds for non-U.S. users. Over the 10 months after launch, those markets processed more than $480 billion in notional volume and maintained about $4 billion in open interest. Across Hyperliquid overall, the platform handled nearly $3 trillion in notional volume during 2025 and more than $1.5 trillion in 2026 through Aug. 23, according to the submission.

As a remedy, Hyperliquid asked the agencies to confirm that cash-settled equity perpetuals with established futures characteristics may be listed as security futures. It also called for a consistent taxonomy between the SEC and CFTC and updates to security futures listing standards so they can accommodate newer contract designs. The filing said the agencies could act through interpretive guidance, policy statements or staff guidance rather than waiting for a formal rulemaking, while preserving flexibility for individually negotiated perpetual-style products to be treated as swaps or security-based swaps when they lack features associated with futures.