Hyperliquid’s Policy Arm Petitions CFTC to Exempt DeFi From Broker Rules

The Hyperliquid Policy Center (HPC), working with self-custody wallet provider Phantom, filed a joint comment letter with the U.S. Commodity Futures Trading Commission (CFTC) ahead of the agency’s July 9 deadline, asking regulators to formally exclude non-custodial DeFi protocols from broker-dealer style oversight. The filing responds to the CFTC’s June 18 Request for Information on rules perceived as blocking financial-technology adoption, and lands as HYPE trades at $67.27, down 0.53% on 24-hour volume of roughly $645.7 million, according to COINOTAG data.

Three concrete asks, one legal theory

The petition centers on a single distinction: on-chain protocol code and self-custody wallets function as tools, not intermediaries, and derivatives rulebooks were never written with them in mind. HPC and Phantom make three specific requests. First, confirmation that publishing on-chain protocol code alone does not trigger exchange or clearinghouse registration requirements. Second, a defined pathway letting registered exchanges and clearing organizations run regulated functions on-chain without abandoning oversight. Third, permanent codification — via formal rulemaking rather than informal guidance — of the no-action relief Phantom already received in March, extended to other self-custody wallet providers.

The filing frames blockchain developers as engineers who build trading systems without themselves acting as regulated intermediaries, since non-custodial wallets neither hold client assets nor execute trades on a user’s behalf. That framing, the petitioners argue, mirrors how automated market maker software already operates without a broker in the loop — potentially improving transparency, settlement speed and counterparty-risk reduction versus intermediated venues that insert a custodial third party between counterparties.

Timing tracks a friendlier CFTC posture

The filing arrives roughly seven months after Michael Selig took over as CFTC chair in December, a tenure that has already pushed toward clearer domestic rules, including movement on approving onshore-listed perpetual futures contracts. That backdrop matters directly for Hyperliquid, whose core product is a perpetual futures exchange: a formal on-chain framework would help determine how much perpetual trading volume migrates onshore into regulated markets versus staying offshore.

HPC and Phantom position the ask as one the CFTC can resolve within its existing authority, without needing new legislation. Procedurally, the agency must now review RFI comments before deciding whether to issue guidance or launch formal rulemaking; no timeline has been disclosed, and neither outcome is guaranteed.

HYPE market structure: negative funding, compressed sentiment

On the tape, HYPE’s 24-hour range sits between $66.00 and $68.73, with the $67.76 resistance level scoring 96 out of 100 on COINOTAG’s technical read and a pivot point at $67.82. The funding rate reads -0.0118%, meaning shorts are currently paying longs — a setup that typically signals crowded bearish positioning being squeezed rather than aggressive new short conviction. Open interest stands near $1.70 billion, while the Fear & Greed Index reads 22, firmly in “extreme fear” territory even as the regulatory narrative turns more constructive.

That divergence — negative funding and depressed sentiment against a policy tailwind — is the structural detail traders will watch heading into the CFTC’s post-RFI review. A favorable rulemaking outcome would be the clearest near-term catalyst for repricing HYPE’s regulatory-risk premium, though the agency has committed to no fixed decision date.

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