The Hyperliquid Policy Center (HPC) is making waves in Brussels. The advocacy group, tied to the popular decentralized exchange Hyperliquid, has formally urged European regulators to treat perpetual futures the same as traditional derivatives β not as a brand-new class of crypto-native instruments.
This push comes at a critical moment. The European Commission is currently reviewing the Markets in Crypto-Assets (MiCA) framework, and the HPC sees a window of opportunity to shape how one of crypto’s most popular trading products gets regulated.
What Is the Hyperliquid Policy Center Asking For?
At its core, the HPC’s position is simple: regulate the product, not the technology. In other words, whether a perpetual future runs on a blockchain or a legacy server should not determine how it is supervised.
The group submitted its recommendations during the Commission’s MiCA review, arguing that perpetual futures should fall under MiFID II β Europe’s existing and well-established derivatives rulebook β rather than being shoehorned into a separate crypto-specific regime.
Why MiFID II Matters
MiFID II (Markets in Financial Instruments Directive II) is the European Union’s main regulatory framework for investment firms and financial markets. It sets strict rules around:
- Transparency and reporting
- Investor protection
- Market manipulation prevention
- Capital requirements for trading platforms
By slotting perpetual futures into MiFID II, regulators would apply decades of tested financial oversight to a product that currently operates in a regulatory gray zone across many jurisdictions.
What Are Perpetual Futures, Anyway?
If you’re new to crypto trading, perpetual futures (often called “perps”) can sound intimidating. Here’s a simple way to think about them:
Imagine a regular futures contract β an agreement to buy or sell an asset at a future date β but with no expiry date. That’s a perpetual future. Traders use them to bet on price movements without ever owning the underlying asset, like Bitcoin or Ethereum.
They’re hugely popular. On Hyperliquid alone, perpetual futures account for the vast majority of trading volume. The platform has become one of the largest decentralized derivatives exchanges globally, processing billions of dollars in daily trades.
Why the Regulatory Question Is So Important
The debate matters because perpetual futures combine two powerful elements:
- Leverage β traders can multiply their exposure, amplifying both gains and losses
- 24/7 crypto markets β no closing bell, no circuit breakers in many cases
Without clear rules, retail traders can face significant risks, and platforms can operate across borders without consistent oversight. For users looking to trade on established platforms while this regulatory landscape evolves, using a regulated exchange like Kraken offers a layer of consumer protection that unregulated DeFi protocols currently cannot match.
The HPC’s Key Arguments
The Hyperliquid Policy Center made several specific points in its submission:
1. Function Over Form
The economic reality of a perpetual future is the same whether it’s settled on-chain or off-chain. Regulators should focus on what the product does, not how it’s built.
2. Avoiding Regulatory Arbitrage
If DeFi perps fall outside MiFID II while identical CeFi (centralized finance) products fall inside it, firms will simply migrate to whichever regime is lighter. This “regulatory arbitrage” undermines both consumer protection and market stability.
3. Consistency with Global Standards
Many jurisdictions already treat perpetual futures as derivatives. Aligning the EU with this approach would help European traders and platforms compete on equal footing.
What This Means for Crypto Traders and DeFi Users
If the European Commission accepts the HPC’s recommendations, the ripple effects could be significant:
- More compliance requirements for DeFi protocols offering perpetual futures to European users
- Greater institutional participation, as traditional finance firms become more comfortable with clearly regulated products
- Potential geo-blocking, where some platforms restrict EU users rather than comply
- Higher trust in legitimate platforms as bad actors get filtered out
For everyday crypto holders, this regulatory clarity is a double-edged sword. It could mean safer trading environments, but also fewer options as some platforms choose to exit the European market entirely.
The Bigger Picture: Crypto Regulation Is Maturing
The HPC’s proposal is part of a broader trend: the crypto industry is increasingly asking for regulation, rather than fighting it. This is a notable shift from the early “regulation is the enemy” stance of many crypto advocates.
Why the change? Because clear rules actually benefit serious projects. They help separate long-term builders from short-term scammers, and they give institutional capital the certainty it needs to enter the space.
Of course, as the regulatory landscape evolves, self-custody remains essential. If you’re holding your own crypto rather than leaving it on an exchange, a hardware wallet like Ledger gives you full control over your assets regardless of what happens with any platform.
What Happens Next?
The European Commission’s MiCA review is ongoing, and final amendments are expected over the coming months. Industry groups, lawmakers, and consumer advocates will all have their say.
For European crypto users, the smartest move right now is to stay informed. Watch how platforms like Hyperliquid adapt, understand the regulated exchanges operating under MiCA, and never risk more than you can afford to lose on leveraged products.
Final Thoughts
The Hyperliquid Policy Center’s push to classify perpetual futures as traditional derivatives is more than a technical regulatory argument β it’s a philosophical statement about how crypto should integrate with the global financial system.
If regulators listen, we could see a future where DeFi and traditional finance operate under the same rules, leveling the playing field and protecting users. If they don’t, expect more uncertainty, more arbitrage, and more risk for everyday traders.
Either way, the conversation is finally happening β and that’s progress for an industry that has spent a decade operating in the shadows.
