Hyperliquid Policy Center Takes Its Perpetuals Fight to Europe
Hyperliquid Policy Center has brought its campaign for onchain perpetual markets to Europe, arguing that the European Union does not need a new regulatory category to govern one of crypto's largest derivatives markets.
Summary:
- HPC argues that perpetual futures can already fit within Europe’s existing derivatives framework.
- The filing challenges whether rules built around bilateral CFDs translate cleanly to public onchain order books.
- HPC warns that applying mismatched rules could fragment liquidity and separate European traders from global markets.
- The MiCA review could lead to legislative changes, but the consultation itself does not create new rules.
In its response to the European Commission’s review of the Markets in Crypto-Assets Regulation, the policy group argues that perpetual futures should be classified according to their economic characteristics rather than the technology or asset through which they are traded.
The filing comes as Brussels considers whether MiCA remains fit for purpose after its initial implementation. The Commission opened the consultation on May 20 and extended the deadline to Sept. 30. Responses will inform reviews required under Articles 140 and 142 of MiCA, potentially laying the groundwork for amendments to the framework.
For Hyperliquid Policy Center, however, the important regulatory boundary may sit outside MiCA entirely.
HPC Wants Europe to Regulate the Contract, Not the Blockchain
At the center of HPC’s position is a classification problem.
A perpetual future provides continuous leveraged exposure without an expiry date. That absence of maturity distinguishes it from conventional dated futures, but HPC argues it does not change the contract’s fundamental role as a derivative.
Its preferred regulatory home is therefore MiFID II, Europe’s existing framework for financial instruments and derivatives, rather than a new product regime constructed through MiCA.
The argument also reflects a position HPC has advanced in the United States. In August, the organization urged the SEC and CFTC to classify perpetual contracts according to their structure instead of simply looking at whether the referenced asset is a security, commodity or another instrument.
That consistency is notable.
HPC is effectively making the same regulatory case on both sides of the Atlantic: the legal treatment of perpetuals should follow their economic function rather than the technology used to trade them.
A Perpetual Can Look Like a CFD Until the Market Structure Changes
The more interesting part of the European filing is not simply which rulebook HPC prefers. It is why the organization believes some existing retail protections should not transfer unchanged to onchain perpetual markets.
Traditional contracts for difference are commonly bilateral products. A customer trades against a provider rather than submitting an order to a central market where multiple buyers and sellers compete.
An onchain central limit order book operates differently.
Buyers and sellers place orders into a shared market, prices emerge from those orders and transactions can be publicly observable on the underlying blockchain. HPC argues that applying restrictions designed around bilateral CFD distribution without accounting for those structural differences could regulate two different trading systems as though they create identical risks.
That does not mean an onchain perpetual automatically becomes safer because it uses a public blockchain.
Leverage, liquidation risk, market manipulation, oracle dependencies and technical failures remain relevant regardless of how transparently trades are recorded. The narrower point is that execution architecture can change which regulatory safeguards are useful and where they need to operate.
That is a stronger argument than simply asking Europe to loosen its rules.
Public Blockchains Create a Second Regulatory Question
HPC is also challenging another assumption inherited from conventional finance: that regulators always need a market operator to reproduce transaction information in a separate reporting system.
Public blockchains already create a persistent transaction record accessible to regulators, market participants and independent analytics providers.
HPC argues that regulators should recognize that verifiability when designing reporting obligations and avoid requiring firms to reproduce information that is already available onchain.
The organization has made a similar case in previous regulatory filings. In comments to the CFTC, it argued that public onchain transaction data can improve price discovery and allow multiple parties to conduct surveillance using the same underlying dataset rather than relying exclusively on proprietary exchange records.
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There is still an important limit.
A blockchain can establish what happened onchain. It does not automatically establish the identity behind every wallet, prove that offchain reference data are accurate or replace every compliance function performed by a regulated institution.
The policy question is therefore not whether blockchain transparency eliminates reporting. It is which information regulators genuinely need intermediaries to submit when part of the audit trail already exists publicly.
The Filing Is Also About Access to Liquidity
HPC’s European intervention carries another market-structure consequence: what happens to liquidity if European perpetual markets are forced into a regulatory structure designed for different products.
The organization argues that inappropriate restrictions could separate European traders from global liquidity pools.
That matters particularly for perpetuals because liquidity concentration is part of their design. Compared with conventional dated futures, HPC argues that perpetual markets can:
- Concentrate trading activity in a continuously available instrument.
- Eliminate mandatory rolls between expiring contracts.
- Reduce fragmentation across contracts with different maturity dates.
- Maintain continuous exposure while concentrating price discovery.
HPC’s August research presented those characteristics as reasons perpetuals can complement rather than simply replicate dated futures.
The regulatory debate therefore reaches beyond whether European traders can access a particular crypto product.
For HPC, the question is whether Europe can impose local investor protections without fragmenting trading activity away from markets where global price discovery already occurs.
MiCA’s Review Does Not Mean MiCA Will Expand
The timing of HPC’s filing matters because the European Commission is conducting a broader review of MiCA rather than drafting a perpetual-specific rule.
The consultation covers crypto-assets, issuers, service providers and developments that have emerged since the regulation entered into application. Its stated purpose is to help the Commission prepare reports required under Articles 140 and 142.
Those reports could be accompanied by a legislative proposal if the Commission concludes that MiCA needs to be amended or supplemented.
Other participants in the review are pushing for changes in areas where they see regulatory gaps. ESMA, for example, used its Sept. 30 response to call for greater clarity around DeFi, crypto-asset classification and emerging services including staking, lending and borrowing.
That provides context for HPC’s intervention rather than changing its central argument. The MiCA review gives Brussels an opportunity to consider expanding or clarifying parts of the crypto framework, while HPC is arguing that perpetual futures should first be assessed against the financial-market rules Europe already has.
The review could therefore reach different conclusions for different parts of the crypto market.
For perpetuals, HPC’s position raises a more specific implementation question: if the contracts already belong within Europe’s derivatives framework, how should those rules apply when execution takes place through continuous markets, public ledgers and onchain infrastructure?
What Happens After the Consultation
The Sept. 30 deadline closes the evidence-gathering stage, not the regulatory process.
The Commission must now assess submissions alongside MiCA’s initial implementation and developments in crypto markets before producing its mandated review. Any conclusion that legislation should change would still require a subsequent proposal and the EU legislative process.
That leaves several questions unresolved.
Regulators will have to determine whether perpetuals traded through central limit order books should receive the same retail treatment as bilateral CFDs, how MiFID II requirements translate to permissionless or partially decentralized infrastructure, and how much regulatory reporting can legitimately be replaced by publicly verifiable blockchain records.
HPC’s filing does not decide any of them.
What it does is put a more precise choice in front of Brussels: whether new financial infrastructure requires new product law, or whether Europe’s existing derivatives framework can accommodate a different way of executing and recording the same economic exposure.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
