The Hyperliquid Policy Center, the new U.S.-based advocacy group led by prominent crypto industry lawyers and lobbyists, argued that Hyperliquid offers a new model for market integrity and transparency in response to a Bloomberg report alleging that Intercontinental Exchange and CME Group are pressing the Commodity Futures Trading Commission to rein in their upstart blockchain-based competitor.
On Friday, Bloomberg reported that ICE and CME, the world’s largest energy exchanges, have been holding conversations on the Hill about the alleged risks Hyperliquid presents, particularly related to the manipulation of global oil prices.
Hyperliquid, the onchain perps exchange, has become an increasingly popular venue for commodities trading, in part because it operates in off-market hours and on the weekend. This week, 21Shares and Bitwise launched ETFs tied to Hyperliquid (HYPE), both noting the rising amount of oil and metals trading occurring on the platform.
"Hyperliquid also offers 24/7 trading, an innovation that substantially increases market efficiency. Prices move whether traditional exchanges are open or not. Continuous trading eliminates gaps and discontinuities between legacy market hours, improving price discovery for all participants," the Hyperliquid Policy Center said Friday on X.
According to Bloomberg’s sources, CME and ICE have been pushing for Hyperliquid to register with the CFTC, which would require Hyperliquid to boost its customer tracking and trade monitoring responsibilities and place it within the U.S. regulatory remit.
For its part, the Hyperliquid Policy Center argued that "Hyperliquid offers enhanced market transparency, publishing a complete onchain record of every transaction in real time, making it a uniquely hostile environment for insider trading or price manipulation."
"Hyperliquid’s transparency serves as a strong deterrent for misconduct and facilitates surveillance, detection, and investigation by regulators and law enforcement," the organization said, noting that "U.S. law is not currently tailored for derivatives markets on public blockchains like Hyperliquid."
Of note, while Hyperliquid has increasingly gained market share of onchain perps DEXes, the platform still only sees a fraction of the activity of Binance, the world’s largest crypto spot and derivatives exchange, according to The Block’s data.
Binance, alongside other major centralized crypto exchanges like Coinbase and Kraken, has been rolling out more traditional assets for trading, including oil. Generally, exchanges have been slower to add derivatives products in the U.S., as compared to other countries and regulatory blocks.
ICE is also a significant financial backer of Polymarket, a prediction market that offers exposure to commodities markets through its binary events contracts. Polymarket is looking to gain full CFTC approval to onboard its global platform in the U.S.