The regulatory landscape around Hyperliquid, perpetual futures, and DeFi broadly is moving fast, and it can be difficult to separate signal from noise. This article aims to cut through that and give readers a clear, up-to-date picture of where things stand: what the current regulatory environment looks like, what the Hyperliquid Policy Center is and what it is trying to accomplish, and what Jake Chervinsky shared in his latest interview with Flood. Whether you are new to the topic or closely following developments, our goal is to make this accessible and keep you informed as things continue to evolve.

As a reminder, HRC (led by GLC and Four Pillars) aims to become the research hub for the Hyperliquid ecosystem. If you want to stay up to date with the latest insights, protocol updates, news, and financial analysis, visit HRC Website. More research is coming soon and something big is on the way. Enjoy the read.

Introduction

In February 2026, Hyperliquid took a step that few DeFi protocols have been willing to take: it went to Washington. The Hyper Foundation announced the launch of the Hyperliquid Policy Center (HPC), a independent Washington D.C.-based 501(c)(4) nonprofit funded by a 1 million HYPE grant, approximately $29 million at the time of announcement, with an explicit mandate to engage U.S. policymakers on the future of onchain derivatives markets.

Leading the effort is Jake Chervinsky, a well-known figure in crypto legal and policy circles, who joins as Founder and CEO. He is joined by Brad Bourque, Policy Counsel and formerly of Sullivan & Cromwell, and Salah Ghazzal, Policy Director, who co-authored a widely circulated Variant Fund proposal in October 2025 arguing for retail access to perpetual futures in the United States. Together, the team brings a rare combination of legal depth, policy experience, and genuine DeFi conviction.

HPC's mission is straightforward but ambitious: introduce policymakers to Hyperliquid and what it represents, produce technical research that regulators can actually use, and champion workable regulatory frameworks for onchain derivatives, not as a defensive measure, but as an active effort to shape the environment before the rules are written.

The Current Regulatory Landscape for Perps and DeFi

To understand why HPC matters, it helps to understand just how unresolved the regulatory picture remains for perpetual futures and DeFi protocols in the United States.

Perpetual futures, the dominant trading instrument in crypto, accounting for the vast majority of global volume, have historically been treated by the CFTC as swaps under the Commodity Exchange Act. That classification matters enormously: swaps are restricted to institutional and sophisticated participants, effectively locking U.S. retail traders out of the market entirely. The result has been predictable: liquidity, volume, and innovation have all developed offshore, with platforms like Hyperliquid building at scale outside the reach of U.S. regulation.

The structural challenge goes deeper than classification. The CEA was designed around the assumption that a regulated market has a legal operator, a company that can apply for and hold a DCM or SEF license, that has compliance staff, legal counsel, and regulatory relationships. In DeFi, that entity simply does not exist. Hyperliquid's market runs onchain, governed by validators and smart contracts, without a centralized operator. Current rulemaking has no clear answer for how to accommodate that architecture, and until it does, protocols like Hyperliquid exist in a grey zone that creates uncertainty for both builders and users.

The prior administration made this worse. Enforcement actions against firms offering software products, including front-ends that merely provided access to onchain protocols, created a chilling effect that pushed development and users further offshore. The current administration has signaled a meaningful change in posture, but clear guidance has yet to arrive.

This is the environment HPC was built to engage.

Takeaways from Jake's Interview with Flood

Flood and Kyle recently hosted Jake Chervinsky on their space for one of the more substantive conversations on crypto regulation to come out of Washington in some time. Here are the key takeaways.

Jake's background

Jake started his career as a lawyer specializing in compliance and government enforcement defense, spending years working directly with regulators including the SEC and the CFTC. He discovered crypto in 2017 and became convinced early that blockchain technology had the potential to fundamentally reshape the financial system. In 2019 he moved into the industry full time, joining Compound where he worked on some of the earliest DeFi governance token models. Over the years he became increasingly involved in Washington policy discussions before ultimately landing at HPC, where his focus is on building the regulatory framework that would allow decentralized finance, and platforms like Hyperliquid, to be legally accessible to U.S. users.

HPC's mission

Jake described HPC as an independent research and advocacy organization focused on advancing clear, constructive regulation for DeFi in the United States. The primary goal is to work with the SEC and CFTC to develop rules that allow Americans to access decentralized markets with appropriate oversight. A major near-term focus is opening access to decentralized perpetual derivatives markets. More broadly, HPC is pushing to ensure that DeFi developers are not misclassified under regulations designed for traditional financial intermediaries, a protection that cases like Tornado Cash have made urgently relevant.

Biden vs. Trump administration

Jake's contrast between the two administrations was stark. Under Biden, policymakers were largely hostile toward crypto, and regulatory activity centered on enforcement rather than rulemaking, with little appetite for building a framework within which the industry could operate. The Trump administration, in Jake's view, takes a fundamentally different approach: the goal is to modernize financial regulation so that decentralized finance can be built domestically, rather than pushed offshore. The framing has shifted from crypto as a problem to be contained to crypto as an evolution of financial infrastructure that the U.S. should lead.

The market structure bill

Jake acknowledged that following the day-to-day progress of major legislation is genuinely difficult, much of the substantive work happens behind closed doors. That said, the market structure bill is moving through Congress. Its core objectives are to create a comprehensive framework for digital assets, including how tokens are classified (security vs. commodity), rules for issuance, and the regulation of secondary markets. Jake flagged developer protection as a critical piece: HPC is actively advocating for provisions in the Clarity Act that would protect builders of non-custodial, open-source DeFi software from being misclassified as money transmitters or financial intermediaries.

Improving the industry's reputation

Jake was candid about the perception problem crypto still faces in Washington. Many policymakers continue to see the space primarily as speculative or gambling-adjacent, a view that parts of the ecosystem have unfortunately reinforced. His prescription: the industry needs to communicate real-world use cases far more effectively, and help policymakers understand why the technology matters to ordinary users. He also pointed to a practical tool: members of Congress are active on X, and direct engagement, calling out bad takes, supporting good ones, signals that voters care and can have a real impact on how politicians approach the issue.

Hyperliquid demonstrating the real power of crypto infrastructure

One of the more compelling moments in the conversation came when discussing the visibility Hyperliquid gained over recent weekends through HIP-3 activity. With traditional markets closed, Hyperliquid saw a meaningful spike in trading volume, a live demonstration of what 24/7 decentralized markets actually look like in practice. Jake highlighted this as exactly the kind of evidence that moves the conversation with policymakers: not theoretical arguments about blockchain's potential, but a platform that is already delivering a materially better financial product to real users around the world.

What success looks like for HPC

Jake outlined three goals for the coming years, noting that achieving even one would represent a major win. First, working with the CFTC to open DeFi perpetual futures markets to U.S. participants, allowing both individuals and institutions to legally trade commodity perpetuals on platforms like Hyperliquid. Second, extending a similar framework through the SEC to enable rulemaking around equity perpetuals. Third, ensuring the Clarity Act passes with strong protections for DeFi developers. The roadmap is ambitious but concrete, and for the first time in a long while, the regulatory environment suggests it may be achievable.

The CFTC Chairman Speaks: A Historic Shift in Tone

The timing of HPC's launch could not have been better. At the Milken Institute's Future of Finance 2026 conference, CFTC Chairman Selig laid out what may be the most consequential regulatory roadmap for crypto derivatives in the Commission's history.

Chairman Selig described Project Crypto as a "historic initiative between the agencies to upgrade and modernize our rules and regulations and future-proof them for technologies like crypto." He was unusually direct on the question of perpetual futures: acknowledging that perps have developed offshore over many years, he stated plainly that "we've got to bring that back to the United States", and put a timeline on it, saying the CFTC is working towards enabling true perpetual futures, not long-dated contracts, in the U.S. "within the next month or so."

Perhaps more significantly for DeFi, the Chairman addressed onchain markets directly. He outlined work towards clear guidance on which digital wallets would implicate CFTC regulations, explicitly criticizing the prior administration's approach of going after "firms that were just offering software products." And he committed to developing regulations that accommodate "onchain software systems, so decentralized finance protocols and other types of blockchain networks", with a promise to clarify what does and does not fall under CFTC jurisdiction, and to modernize rules for those that do.

HPC responded promptly, applauding the Chairman's approach and signaling its readiness to support his work.

Jake's own read on the announcement was characteristically precise. While welcoming the direction, he offered an important distinction: when Chairman Selig refers to approving crypto perps in the near term, that likely means perps on centralized exchanges, where the legal infrastructure to self-certify already exists. What CEXes currently offer as "perps", he noted, are technically long-dated futures, a different product. Approval for true DeFi perpetuals, without a centralized operator to hold a license, will likely take longer. It is exactly that gap, between what CEXes can do now and what DeFi protocols need, that HPC exists to close.

Conclusion

The launch of HPC is a significant moment, and not just for Hyperliquid. It represents one of the most credible and well-resourced efforts yet to engage the U.S. regulatory process on behalf of DeFi, not defensively, but constructively.

We are genuinely pleased to see this initiative funded by the Hyperliquid team and led by someone of Jake's caliber and integrity. The crypto industry has too often waited for regulatory frameworks to arrive and then scrambled to adapt. HPC represents a different posture: an active effort to help build the next regulatory landscape for DeFi before the rules are set in stone. We are confident it will have a meaningful and positive impact on how policymakers think about onchain derivatives, and by extension, on the broader industry.

The pace of change is also worth noting. We are watching regulatory developments unfold in real time, and as Hyperliquid continues to grow, increasingly visible even in weekend price action across major assets, its relevance to policymakers will only increase. Protocols that move markets get attention. That attention, channeled well, is an asset.

We are also glad to see Jake so active in public discourse, particularly on X. As new information continues to emerge about DeFi regulation, having a high-quality legal mind sharing clear, precise analysis in real time is genuinely valuable. The space generates enormous noise around regulatory developments, much of it misinformed or agenda-driven. Jake's voice is a meaningful counterweight to that, and we expect his public commentary to become an increasingly important resource for anyone trying to understand where this is all heading.

The next chapter of DeFi regulation is being written now. HPC intends to have a hand in writing it, and so do we.

Hyperliquid.