OKX, one of the world's largest cryptocurrency exchanges, developed a decentralized perpetual futures trading platform in 2023 but chose not to launch it due to regulatory uncertainties, according to founder and CEO Star Xu. The exchange's Web3 arm built the unnamed platform, which was similar to existing decentralized perpetual exchanges like Hyperliquid and Aster.
Xu specifically cited the Commodity Futures Trading Commission's (CFTC) enforcement action against Deridex in September 2023 as a primary concern. The CFTC had alleged that Deridex was illegally offering digital asset derivatives trading and failed to register as a swap execution facility or futures commission merchant, with particular focus on its perpetual swaps offerings. Other protocols including Opyn and ZeroEx were also mentioned in that enforcement action for illegally offering leveraged retail commodity transactions.
Despite the shelved product, Xu praised Hyperliquid's success, noting it "proved that massive success in onchain perps can be achieved with very few employees" and has become one of DeFi's top perpetuals venues, logging approximately $319 billion in trading volume in July 2024 alone. Meanwhile, ASTER, backed by CZ-affiliated YZi Labs and launched as a direct competitor to Hyperliquid, has recorded over $22 billion in trading volume in the last 30 days.
Xu emphasized that while smaller teams can experiment with agility, larger established players like OKX must exercise greater caution to protect users and stakeholders. He called for clearer regulatory frameworks that would create a level playing field, arguing that transparent rules could unlock further innovation by allowing major exchanges to participate in decentralized finance without fear of retroactive enforcement.
The comments come amid a significant shift in U.S. regulatory stance following the election of crypto-friendly President Donald Trump. Recent developments include the CFTC appointing crypto industry leaders to its Digital Asset Markets Subcommittee and a White House report recommending shared oversight between the CFTC and SEC for digital assets.