Trump Names Hyperliquid Entering the U.S., A Moment of 'Reconciliation' for DeFi

Author: Deep Tide TechFlow

On August 19, Trump made a statement at the White House crypto industry conference that left the entire crypto market holding its breath: CFTC Chairman Mike Selig is working to allow Hyperliquid to enter the U.S. market in a "fully compliant and legal" manner. The HYPE token immediately surged, reaching a peak increase of about 19% to $69.6, with a market cap touching $17.6 billion. Hyperliquid Strategies (PURR), listed on NASDAQ, saw its stock price rise over 30% that day.

However, Trump did not specify any concrete path. The CFTC has not approved Hyperliquid to operate in the U.S. The gap between a statement from the President and a compliance license may not only be time but also a fundamental question that the DeFi industry has never truly answered.

The King of Decentralized Perpetual Contracts

Currently, Hyperliquid is the absolute ruler of the on-chain perpetual contract market.

In 2025, it processed approximately $2.9 trillion in trading volume, capturing over 70% of the on-chain perpetual contract market share. In Q1 2026, the quarterly trading volume reached $633 billion. By mid-2026, the cumulative trading volume surpassed $4.7 trillion. The daily trading volume fluctuates between $3 billion and $10 billion, with a 30-day rolling trading volume nearing $190 billion.

It operates on its self-built L1 blockchain HyperBFT, optimized for derivatives trading, with an order processing speed of 200,000 transactions per second and sub-second confirmations. USDC serves as the settlement asset, offering over 300 trading pairs with up to 40x leverage. In 2026, it began expanding into perpetual contracts for non-crypto assets, covering crude oil, gold, and stock indices, marking the first time on-chain perpetual contracts touched the territory of traditional commodities and stock markets.

The comparison is straightforward: CME holds about 92% of the U.S. derivatives market share, but it closes on weekends. A trading company needing to hedge its crude oil positions bears the full gap risk from Friday afternoon to Sunday night. Hyperliquid offers 24/7 uninterrupted trading, directly eliminating this structural disadvantage.

But Hyperliquid's competitiveness is not just about trading speed and all-day coverage. Its core product logic is: Users connect directly through wallet protocols to complete margin management, order matching, and clearing settlements on-chain, without needing to entrust their assets to any intermediaries.

No brokers, no KYC, no traditional "account opening" processes. Users have complete self-custody control over their funds.

This is precisely why it is blocked from the U.S. market, and it is also why it can attract global traders.

The Compliance Paradox

Now, putting Trump's statement back into the context of Hyperliquid's product architecture, the problem immediately surfaces.

The U.S. CFTC's regulatory framework for derivatives trading venues is designed for a world with intermediaries. It requires: Designated Contract Markets (DCM) to be responsible for order matching and market monitoring; Futures Commission Merchants (FCM) to handle customer fund segregation and margin management; Derivatives Clearing Organizations (DCO) to manage central counterparty clearing and default handling. Each layer has clear registration, reporting, and auditing obligations.

However, Hyperliquid's product design precisely removes all three layers of intermediaries.

Smart contracts execute matching, on-chain protocols handle clearing, and users self-custody their funds, making the entire process independent of DCM, FCM, or DCO. In a joint opinion letter submitted to the CFTC in July, Hyperliquid Policy Center and Phantom clearly stated: The operational mode of on-chain protocols fundamentally differs from traditional markets, where users self-custody their private keys and interact directly via smart contracts. The existing registration requirements for custodial intermediaries should not automatically apply to non-custodial protocol developers.

This is the core of the compliance paradox: For Hyperliquid to enter the U.S., it must, to some extent, accept compliance requirements such as KYC verification, customer asset segregation, market monitoring, dispute resolution, and broker access. But each of these requirements undermines its product differentiation advantage compared to CME and Coinbase.

How much difference remains between a Hyperliquid that requires broker intermediaries and a CME that supports 24/7 perpetual contracts?

Three Possible Paths

The Hyperliquid team is clearly not thinking about this issue for the first time. From the establishment of the Hyperliquid Policy Center in February 2026 to visiting the SEC's crypto working group with Sullivan & Cromwell in July, and submitting a joint opinion letter with Phantom to the CFTC on July 9, they have been systematically pushing for clarity in regulatory pathways.

From the current regulatory framework and industry dynamics, three feasible paths emerge:

Path One: Build an "American Version of Hyperliquid."

While retaining the core protocol, a separate front end for U.S. users could be built, incorporating KYC gateways, trading limits, and compliance monitoring modules. This is similar to the relationship between Binance and Binance US, where the underlying technology is shared, but the regulatory compliance layer is entirely independent. The advantage is that it retains the original protocol's freedom in the global market, but the downside is that the user experience for the U.S. version will inevitably degrade: more review steps, slower launch speeds, and possibly fewer trading pairs.

Path Two: Collaborate with licensed exchanges or brokers, providing only the underlying technology.

There are precedents for this path. ICE's CEO Jeffrey Sprecher publicly stated in May 2026 that ICE had engaged in "exploratory discussions" with Hyperliquid. If Hyperliquid acts as a technology provider, offering on-chain matching and settlement engines to regulated DCMs, it would not need to register as a trading venue itself but could embed within the existing compliance framework as an infrastructure layer. CME has already launched 24/7 trading in 2026, and if it integrates on-chain clearing, the efficiency gap would further narrow. However, this would mean Hyperliquid transforms from a financial platform into a SaaS provider.

Path Three: CFTC Designs a New Compliance Framework for On-Chain Perpetual Contracts.

This is the direction that the joint opinion letter from Hyperliquid Policy Center and Phantom genuinely pushes for. They propose three key demands: Developing and releasing on-chain protocol software itself should not trigger registration obligations; registered DCMs and FCMs should be allowed to use on-chain infrastructure to perform regulated functions; and the CFTC's previous exemption letter to Phantom should be formalized into rules. If the CFTC accepts this framework, it would mean that regulators acknowledge a new paradigm: on-chain protocols can serve as the execution layer for regulated activities, with regulatory obligations falling on the registered entities using the protocol, rather than the protocol developers.

Selig tweeted after the White House meeting, promising to provide more details at the first meeting of the CFTC Innovation Advisory Committee on August 20. The committee includes CEOs from Coinbase, Robinhood, Kalshi, and Polymarket, who are both potential partners and competitors of Hyperliquid.

This Is Not Just About Hyperliquid

Zooming out.

Trump naming a DeFi protocol at the White House is itself a watershed event. It signifies that decentralized finance has upgraded from "an experimental edge in a regulatory gray area" to "a presidential-level industrial policy issue." On the same day, the SEC announced the Regulation Crypto Assets framework proposal, providing an exemption pathway for crypto asset issuance of up to $75 million annually.

However, the distance between signals and reality is often greater than what the market prices in.

The reality is: Hyperliquid is still blocking U.S. users in its terms of service, the CFTC has not approved any operating licenses, specific compliance pathways have not been disclosed, and the CLARITY Act is still stalled in the Senate, with the earliest possibility of being revisited in September.

In the traditional financial sector, ICE and CME have already begun to push back.

The two companies jointly urged regulators in May to review Hyperliquid's expansion into commodity perpetual contracts, citing market manipulation risks and market integrity issues. CME even filed a lawsuit regarding the CFTC's stance on crypto perpetual contracts. Traditional exchanges will not sit idly by while an on-chain protocol takes away their market share, especially in the regulated derivatives market, which CME considers its core territory.

Ultimately, the conclusion of this story depends on a deeper game: How much institutional space are U.S. regulators willing to create for DeFi, and how much product purity is DeFi willing to sacrifice to enter the U.S.?