FalconX Bravo has formally asked U.S. regulators to classify cash-settled perpetual contracts tied to a single security or a narrow-based security index as security-based swaps under SEC rules when they fall outside the joint SEC-CFTC security-futures framework. The proposal, submitted to the Securities and Exchange Commission and Commodity Futures Trading Commission on Aug. 12, expressly includes comparable contracts offered through DeFi protocols.
In a separate comment letter filed Aug. 24, the Hyperliquid Policy Center urged the SEC and CFTC to establish a coordinated regulatory approach for perpetual contracts. The group argued that cash-settled equity perpetuals with traditional futures traits should qualify as security futures, a category already subject to joint oversight by both agencies. Hyperliquid said classification should focus on a contract’s economic features and trading characteristics rather than solely on the type of underlying asset.
FalconX said its definition covers the specified perpetuals and options on them, but does not extend to Bitcoin perpetuals or crypto perpetuals generally. For affected dealers, SEC treatment could trigger registration, business-conduct, transaction-reporting, capital, margin, and segregation requirements. FalconX also asked the SEC to reduce duplicated requirements for firms already overseen by the CFTC by raising the combined-notional threshold for alternative compliance from 10% to 49%.
The developments follow the CFTC’s May 2026 approval of the first U.S.-listed perpetual contracts as futures. Hyperliquid’s HIP-3 markets, which include contracts on oil, metals, currencies, equity indices, and individual stocks, have recorded more than $480 billion in trading volume over roughly ten months, with open interest around $4 billion. The comment window closed Aug. 24. Neither submission represents agency policy, and closing the docket does not authorize any product or commit either regulator to rulemaking.
