Hyperliquid founder Jeff Yan has proposed a new US regulatory approach in which authorities would oversee the companies operating financial markets on his Layer 1 network, rather than treating the underlying blockchain as a traditional cryptocurrency exchange. Speaking on Bloomberg’s Odd Lots podcast, Yan argued that Hyperliquid’s Layer 1 should be viewed as shared financial infrastructure, with obligations applying to businesses that create, deploy and control markets operating on the network.
“Regulation sits at the layer where controls exist, and it is precisely the operators who exercise those controls,” Yan said. He compared the model to the internet, where financial services firms must comply with applicable rules while the underlying technology is not subject to the same requirements. Yan stressed that the network is designed to support institutions rather than replace them, saying: “We’re not trying to displace anything.”
Bloomberg reported that Payward, the parent company of Kraken, plans to offer derivatives to US investors through a regulated exchange using Hyperliquid’s technology. The initiative would place a CFTC-supervised operator on Hyperliquid’s infrastructure, although Hyperliquid’s own perpetual futures market remains unavailable to US users. The report does not mean Hyperliquid itself has received authorization to serve US customers.
The comments follow President Donald Trump’s August remarks that the CFTC was working to bring Hyperliquid into the US market under federal regulation. The debate also highlights wider questions in decentralized finance about where regulatory responsibility should sit when developers, operators and users have overlapping roles.
