UK FCA Flags Hyperliquid as U.S. Regulators Warm to Perps

Hyperliquid is drawing renewed attention as one of crypto's largest perpetual futures venues, following a May warning in which the UK's financial regulator listed Hyperliquid and Hyper Foundation as unauthorized amid broader concerns over crypto perps.

The warning came from the UK's Financial Conduct Authority, which said in a notice dated May 21 that Hyperliquid, Hyper Foundation, the protocol's app, and its social channels may be offering or promoting financial services in the UK without permission.

The notice appears to have drawn little attention until this week, when it began surfacing more prominently in search results reviewed by Decrypt.

Hyperliquid "may be providing or promoting financial services or products" without its authorization, the regulator said, warning users to "avoid dealing" with the platform.

This week, CME Group CEO Terry Duffy warned that crypto perps could become a "disaster waiting to happen" as U.S. regulators allow similar products to enter regulated markets, Reuters reported Friday.

The market had been "supplanted by the speculation market," Duffy said, criticizing the CFTC's process for approving what he called a "novel and complex" product.

In remarks made last Wednesday, Intercontinental Exchange CEO Jeffrey Sprecher said the NYSE parent was studying Hyperliquid's model and asking regulators why traditional venues could not offer similar products.

Two days later, the CFTC approved prediction market platform Kalshi to offer Bitcoin perpetual futures.

The CFTC issued an order Friday allowing Kalshi to offer perpetual futures tied to Bitcoin's price in the U.S., reflecting the regulator's growing acceptance of the derivatives.

Although the prediction market described the debut in a blog post as the "first-ever perpetual futures in America," the CFTC flashed a green light for Bitnomial in December under former chair Caroline Pham to offer similar products—albeit with a 25-year limit, because nothing says "perpetual" quite like a hard expiry date.

Hyperliquid is one of the largest decentralized venues for crypto perpetual futures, or perps, a type of derivative that lets traders bet on token prices with leverage and no expiry date.

Unlike standard futures traded on regulated exchanges such as CME, perps can stay open indefinitely and use regular funding payments to keep prices close to spot markets.

The scale of Hyperliquid's market has also made it harder to ignore. By May 20, the platform had reportedly generated $255 million in year-to-date revenue, while its HYPE token had surged 101% over the same period—living up to the ticker.

"Crypto perps have grown into one of the dominant mechanisms for expressing directional views on digital assets," Matthew Pinnock, COO of Altura DeFi, told Decrypt.

Volumes processed on venues such as Hyperliquid have made it "impossible" for traditional market participants to treat them "as peripheral," he added.

U.S. approvals for certain perps products and growing institutional interest have also pushed the question of how these instruments fit within regulated markets, Pinnock added.

Now, regulators are watching the "growing role [that] perpetual futures play in price discovery," Pinnock said, with platforms such as Hyperliquid allowing traders to express views on assets "often well before traditional markets provide similar access."

Hyperliquid has become a wake-up call for traditional markets, prompting discussions with the crypto venue, studying its 24/7 model, and asking regulators whether U.S. exchanges can offer similar perpetual futures under clear rules.

That's according to Jeffrey Sprecher, founder, chairman and CEO of Intercontinental Exchange, who spoke at a fireside chat during Bernstein's 42nd Annual Strategic Decisions Conference on Wednesday.

"We're not freaked out about it," Sprecher said, referring to Hyperl...

The FCA's warning on Hyperliquid suggests regulators are taking different paths on the same market, with the UK flagging an offshore venue while the U.S. begins