Key Takeaways
- President Donald Trump says the CFTC is working to bring Hyperliquid into the US in a “fully compliant and legal fashion,” as regulators create a path for perpetual futures onshore.
- Enso CEO and co-founder Connor Howe argues that Hyperliquid would not need to abandon self-custody, onchain settlement, or 24/7 trading to meet US standards; instead, KYC, eligibility, and accountable entities could sit at the perimeter.
- Howe sees execution integrity at institutional scale, rather than liquidity or settlement, as the harder technical problem if onchain perpetuals begin competing for professional derivatives flow.
Hyperliquid’s potential entry into the US does not have to turn the decentralized perpetual futures venue into another traditional exchange, according to Connor Howe, CEO and co-founder of Enso.
The question has become more immediate after President Donald Trump said on Aug. 19 that CFTC Chair Michael Selig was working to bring Hyperliquid into the US in a “fully compliant and legal fashion.” Hyperliquid’s HYPE token jumped following the remarks.
That push is coming as the CFTC begins to provide perpetual futures with a clearer regulatory path. In May, the agency issued a policy statement covering perpetual contracts and permitted a Bitcoin perpetual contract on a designated contract market. It later provided a route to convert existing crypto futures into “true” perpetual futures under specified customer-protection conditions.
Hyperliquid itself operates very differently from a conventional US derivatives exchange. Its perpetual contracts have no expiration date, use recurring funding payments, and are generally margined in USDC. Trading takes place through an on-chain order book, with users controlling their own wallets rather than depositing assets with a traditional broker.
Howe told CCN that bringing this structure inside the US regulatory perimeter is less about rewriting its settlement technology and more about proving who is accountable for it.
“None of this is really a technology problem for Hyperliquid. Their onchain settlement doesn’t need to change. What changes is the standard it gets held to once it touches US clearing and custody.”
Can Hyperliquid Meet US Clearing Rules Without a Clearinghouse?
Traditional US derivatives markets rely heavily on clearinghouses. They stand between buyers and sellers and manage the risk that one side cannot meet its obligations.
Hyperliquid takes another route: positions, collateral, and liquidations are managed through its onchain infrastructure rather than through the traditional sequence of broker, exchange, and clearing intermediary.
Howe argues that regulators should examine whether the outcome of that system meets the same policy objective rather than requiring the same architecture.
“Clearing exists so a trade still settles even if a counterparty fails. Hyperliquid settles instantly and self-custodially, so that failure window is basically gone to begin with. The real gap is evidence: a trail you can reconstruct from quote to margin to settlement, tied to a registered entity.”
That would still require a regulated point of responsibility for US customers.
“What’s missing is a registered party sitting at the edge who can stand behind KYC and market conduct for US persons, in front of the same rails.”
His proposed model is therefore not completely permissionless for US participants. Access controls would determine whether a wallet is eligible to trade, while the underlying execution and settlement system could remain on-chain.
“Put an accountable entity, a settlement trail, and eligibility checks at the perimeter, and you get a venue that clears US standards without slowing down what made it work in the first place,” Howe said. “Nothing has to sit between the trade and its settlement.”
The concept overlaps with an argument now being made directly to regulators. The Hyperliquid Policy Center has urged the SEC and CFTC to recognize decentralized mechanisms that can satisfy regulatory objectives without automatically forcing transactions back through centralized intermediaries.
KYC at the Wallet, Not Inside Settlement
That still leaves surveillance and identity requirements.
US-regulated derivatives venues operate with customer identification, trading surveillance, and market-conduct controls that do not naturally resemble open blockchain markets.
Howe believes those controls can be separated from the base trading infrastructure.
“The difference is where the two models put accountability. TradFi puts it on the intermediary sitting between the user and the trade. Onchain, execution is permissionless, so compliance moves to the edges: KYC and eligibility get enforced at the wallet or interface layer instead of the settlement layer.”
There is already a useful characteristic for surveillance: transactions leave a persistent blockchain record on the blockchain.
But a public record alone does not detect manipulation, sanctions exposure, or abusive trading. Someone still has to monitor it and connect wallet activity with regulated identities.
“Surveillance gets easier because the ledger is a public, permanent record,” Howe said. “The harder part is running that analysis continuously instead of periodically.”
That becomes particularly relevant for markets that do not close.
“TradFi compliance assumes a daily close. A market that never closes needs controls that never stop either, and because onchain infrastructure already runs that way by default, it should be an obvious fit.”
The CFTC is already considering the broader implications of round-the-clock derivatives markets. Its current work extends beyond crypto, including questions about moving conventional futures toward 24/7 trading.
Regulation Could Still Push DeFi Back Toward Centralization
The largest policy risk, in Howe’s view, is not that decentralized infrastructure cannot satisfy regulators.
It is that rules could be designed around the architecture regulators already understand.
“Compliance requirements don’t favor either architecture on their own. You can enforce a settlement trail, KYC, and eligibility checks on top of a decentralized base layer just as well as inside a centralized one. The risk is regulators writing frameworks around the venues they already know how to regulate, which happen to be centralized, and treating that familiarity as a requirement instead of a default.”
That choice would carry its own trade-offs.
“Centralizing to make compliance easier usually means bringing back the custody and counterparty risk decentralized settlement was built to remove, in exchange for oversight that could have lived at the edges instead,” Howe said.
US regulators have nevertheless begun to open the door to crypto-native market structures. In May, the CFTC confirmed that certain crypto perpetuals can qualify as futures and subsequently created regulatory paths for their listing.
The unanswered question is how much of the underlying DeFi architecture can survive once the venue serves regulated US customers.
The Harder Problem Is Institutional Execution
For Howe, identity is not even the most difficult technical challenge.
Hyperliquid already supports large leveraged positions, with its current margin schedule allowing BTC positions of up to $150 million in the highest 40x leverage tier before lower leverage limits apply.
But institutional adoption introduces a different requirement: predictable execution when very large orders interact with markets moving block by block.
“Liquidity and settlement aren’t the hard part. Capital shows up wherever the infrastructure works, market forces sort that out on their own. What worries me is execution integrity at institutional volume: making sure the quote a risk desk sees is what they get, every time, with margin and liquidation logic holding through 24/7 trading instead of resetting around a close.”
That gap between receiving a quote and executing it becomes more expensive as trade size increases.
“A quote gets built against one block, and by the time it lands, the market’s moved. At institutional size, that gap is where money gets lost. You catch a decayed quote, a toxic pool, a route that won’t survive contact with the market, before the transaction signs. After that, it’s already too late.”
For infrastructure providers such as Enso, which builds routing and execution tools across onchain applications, that is where Howe sees the more difficult engineering work. Enso already supports routing into non-tokenized positions including Hyperliquid spot.
“Identity and compliance are the easier problems by comparison,” he said. “They’re policy checks, running in the same pre-trade pass as everything else.”
Could Hyperliquid Actually Compete With CME?
A US-compliant Hyperliquid would eventually raise another question: whether onchain perpetuals can take trading volume from established derivatives exchanges such as CME.
Howe does not see that as an immediate winner-takes-all contest.
“CME and onchain venues are pulling from different pools of volume more than going head to head for the same trader. CME serves institutions built around standardized contracts, scheduled sessions, and a clearinghouse absorbing counterparty risk between trade and settlement. Onchain venues pull in people who want instant, self-custodial settlement and markets that never stop, a different set of priorities built on different infrastructure entirely.”
He instead sees the battle forming between those two groups.
“The institutional middle is where it gets interesting to me. As onchain venues prove they can hold execution integrity at scale, some of the flow that defaults to CME out of habit starts looking for 24/7 access and self-custodial settlement too.”
That is now more than a theoretical regulatory debate. The CFTC has accepted filings for US perpetual futures referencing Bitcoin (BTC), Ether (ETH), Solana (SOL) and XRP, while Trump has publicly named Hyperliquid in the push to bring perpetual markets onshore.
The question is no longer simply whether perpetual futures can exist legally in the US
For Hyperliquid, it is whether US compliance can be added around an onchain exchange without putting intermediaries back between the trader and settlement and whether institutions will trust that architecture once real size begins moving through it.
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The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
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