Hyperliquid founder Jeff Yan laid out a regulatory approach on Bloomberg's Odd Lots podcast that would keep his blockchain itself outside the reach of US exchange oversight, even as American regulators weigh how to bring offshore trading venues into the domestic system. Yan argued that compliance obligations should fall on the financial firms that build and operate markets on top of Hyperliquid's Layer 1 network, not on the network itself.

"The regulation sits at the layer where there are controls, and indeed the deployers are the ones that exercise these controls," Yan said.

The comparison Yan drew was to internet infrastructure. Just as regulators don't hold a cloud provider responsible for what a bank builds on its servers, Yan wants US authorities to separate the underlying blockchain from the businesses that deploy trading markets using it. The framing would let Hyperliquid expand its footprint toward Wall Street institutions without taking on the compliance burden a traditional exchange carries.

"We're not trying to displace anything," Yan said. "In fact, I think the technology can benefit everyone who currently operates markets in a more traditional setting."

A platform still closed to the market it wants to reach

Hyperliquid runs the largest decentralized perpetual futures exchange by trading volume, but the platform remains closed to US customers. The restriction has not stopped American financial firms from building around it. Kraken's parent company, Payward, plans to offer derivatives to US investors using Hyperliquid's underlying technology, channeled through a regulated exchange structure. For Hyperliquid, that arrangement would effectively add a CFTC-regulated operator running on its infrastructure, even while its own perpetuals market stays off-limits to American traders.

Payward's Hyperliquid-based derivatives plan follows Kraken's broader push into regulated US derivatives trading after it acquired futures exchange NinjaTrader in 2025, a deal aimed at giving Kraken a CFTC-licensed pathway for derivatives it could not otherwise offer directly to US retail customers. That acquisition gives useful context for why Payward, rather than Hyperliquid itself, would be the entity carrying regulatory responsibility under Yan's proposed model.

Political pressure already pointed this direction

Yan's comments landed months after President Donald Trump said in August that the CFTC was working to bring Hyperliquid into the US under federal regulation, a statement that put the exchange on a collision course with American securities and derivatives law well before Yan offered his own framework for how that might work. The CFTC regulates derivatives markets including futures and the kind of perpetual swaps Hyperliquid specializes in, which is why the agency rather than the SEC has been the one named in connection with bringing the platform onshore.

The CFTC's posture toward crypto derivatives has shifted noticeably since early 2025, when the agency dropped a number of enforcement actions against crypto firms that had been pursued under the previous chair, and has since signaled more openness to working with exchanges on tailored frameworks rather than forcing crypto-native platforms into rules built for traditional futures markets. Yan's proposed split between infrastructure and market operator fits that more cooperative posture better than it would have fit the agency's approach just two years earlier.

Why the infrastructure argument matters beyond Hyperliquid

Yan's framing isn't just a defense of Hyperliquid's current structure, it's a template he's pitching for how an entire category of blockchain-based trading infrastructure might coexist with US financial regulation going forward. If regulators accept that a Layer 1 network can function as shared, permissionless infrastructure while the firms building regulated products on top of it carry compliance responsibility, that logic would extend well past one exchange. It would effectively create a blueprint other blockchain-based trading venues could point to when negotiating their own regulatory treatment.

Hyperliquid's own growth gives the proposal some weight. The network has processed billions of dollars in daily perpetual futures volume through 2025 and into 2026, at times rivaling volume on centralized exchanges like Binance for specific trading pairs, according to data regularly tracked by DefiLlama. That scale is part of why US regulators and institutions have taken notice in the first place, and why a framework resolving the tension between decentralized infrastructure and centralized compliance carries stakes beyond Hyperliquid's own user base.

Whether US regulators adopt anything resembling Yan's proposed split remains unresolved, and neither the CFTC nor the SEC has publicly endorsed the infrastructure-versus-operator distinction Yan describes. For now, the arrangement exists mostly as a pattern already forming in practice, with Payward's planned Hyperliquid-powered derivatives product serving as the clearest working example of regulated US firms building on top of infrastructure that itself stays outside direct exchange oversight.

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