Hyperliquid Wants CFTC to Exempt DeFi From Legacy Crypto Rules

The Hyperliquid Policy Center (HPC) and non-custodial wallet provider Phantom have jointly asked the Commodity Futures Trading Commission (CFTC) to stop regulating decentralized finance (DeFi) like traditional financial firms.

The two filed their joint comment ahead of the CFTC’s July 9 comment deadline. They argue that onchain software and self-custodial wallets are tools, not the intermediaries that existing derivatives rules were written to govern.

What the Hyperliquid CFTC Filing Requests

The submission answers a CFTC request for information (RFI) issued on June 18. The RFI asked the industry to flag rules that hold back financial technology.

HPC and Phantom set out three requests. First, they want confirmation that publishing onchain protocol software does not alone require registration as an exchange or clearinghouse.

Second, they want registered exchanges and clearinghouses to run regulated functions on onchain systems. That would let them modernize US derivatives rules without dropping compliance duties.

Third, they want the March no-action relief granted to Phantom written into a formal rule. That would give other wallet providers the same certainty.

Self-Custody Sits at the Center of the Push

HPC and Phantom argue that non-custodial wallets never hold customer funds or execute trades. On that basis, they should not carry intermediary obligations, much like other crypto wallet interfaces.

The groups say rules built for on-chain markets would keep developers in the United States rather than offshore. They add that transparent DeFi markets can settle faster and cut counterparty risk.

The filing lands under a friendlier CFTC. Chairman Michael Selig took office in December. He has since pushed US crypto regulation toward clearer rules and approved onshore perpetual futures.

The groups framed the request as within the CFTC’s current authority.

This is our answer, and it is within the Commission’s own authority to act on,” HPC and Phantom said as much in their joint statement.

The CFTC will weigh industry responses before deciding whether to issue guidance or begin rulemaking. Its answer could determine how much onchain activity moves onshore.