FCA Warns on Hyperliquid as CME, ICE Raise Market Concerns

On May 21 the Financial Conduct Authority added Hyperliquid and the Hyper Foundation to its consumer warning list, saying the firms may be providing or promoting financial services in the UK without authorization. The FCA listed the Hyper Foundation website, the Hyperliquid trading app and related social channels and advised consumers to avoid dealing with the entities. The regulator also warned users they would not be able to use the Financial Ombudsman Service or the Financial Services Compensation Scheme to recover losses.

Hyperliquid is a decentralized, non‑custodial derivatives exchange that offers perpetual futures-leveraged contracts with no expiration-and HIP‑3 markets that provide synthetic exposure to stocks, commodities and private companies. The platform operates 24 hours a day. Hyperliquid reported real‑world asset open interest of $3 billion and said HIP‑3 recorded new monthly open‑interest highs each month since its October 2025 launch.

Executives from CME Group and Intercontinental Exchange submitted filings to the Commodity Futures Trading Commission raising concerns that a decentralized venue with limited identity checks could enable price manipulation, coordination around market‑sensitive information or sanctions evasion. They warned trading on Hyperliquid could spill into global oil benchmarks if state‑backed entities or sanctioned actors use the platform to gain exposure outside conventional oversight.

Legacy derivatives exchanges operate with approved contracts, centralized clearing, surveillance systems and margin rules. Hyperliquid’s model relies on public blockchain records and open access, a contrast highlighted in the exchanges’ filings to the CFTC.

U.S. regulators have taken steps to create regulated paths for perpetual futures. The CFTC approved a Bitcoin perpetual for listing on a registered venue, issued guidance on perpetual derivatives and 24‑hour trading, and provided interpretive guidance and limited relief related to a U.S. firm’s access to certain offshore perpetual products. Hyperliquid blocks direct access to U.S. residents.

The Hyperliquid Policy Center argued the platform publishes a complete on‑chain record of transactions in real time, which it described as enabling surveillance, detection and investigation by regulators and law enforcement. The group added that continuous trading can improve price discovery because markets move when legacy exchanges are closed.

Kyle Samani, chairman of Forward Industries, described the FCA action as “the first of many.” Former Boston Fed president Eric Rosengren noted that 24‑hour exchanges allow traders to respond to announcements and that metals and oil markets have shown weekend activity.

Derek Edwards, managing partner at Collab Currency, outlined several paths Hyperliquid could take to access regulated markets: remain offshore, build a U.S. regulated wrapper with separate customer funds, decentralize further to meet proposed market‑structure rules, convert into a centralized corporate exchange, or lobby for a new regulatory framework. Each option would alter the platform’s operations, affect its product range and raise questions about token economics and legal classification.

The FCA notice and the filings by CME and ICE have focused regulatory attention on platforms that blend on‑chain infrastructure with exposure to traditional assets, leaving Hyperliquid to consider how it will respond to those pressures.