Hyperliquid, a decentralised finance (DeFi) technology, recently took a big step in the changing regulation of cryptocurrencies in the United States. The Hyper Foundation said on May 22 that it had formally responded to the CFTC's (Commodity Futures Trading Commission) request for comments on 24/7 trading and perpetual trading.
The platform aimed to be a practical demonstration of how decentralised finance principles might address regulatory issues while maintaining market efficiency and user protection. Hyperliquid's operational capabilities were highlighted in the 24/7 trading submission. This involves removing dependency on conventional banking infrastructure by providing ongoing liquidity through pre-funded collateral. With each trade and Oracle price update, the platform's automated liquidation system regularly reexamines margin requirements. The CFTC's concerns about collateral management are also addressed by this.
For 24/7 trading it emphasized the importance of liquidity, collateral management, operational resilience, and regulatory surveillance, highlighting the effectiveness of defi in addressing these aspects.
• Provides transparency and verifiability: All actions are publicly auditable on blockchain, with sub-second finality.
• Encourages composure and innovation: Developers can build innovative applications using smart contracts.
• Promotes self-custody: Users maintain control of assets using their own wallets, mitigating counterparty risks.
Connecting Regulatory Compliance with DeFi
Projects interaction with the CFTC is indicative of DeFi projects' proactive efforts to collaborate with authorities to develop frameworks that safeguard users without impeding innovation. The team sees its platform as a real-world illustration of how decentralised finance may improve contemporary markets via openness, constant trading, and strong risk management.
Hyperliquid's observations could influence how crypto derivatives are regulated in the US as the CFTC develops new regulations. A more balanced framework might result from this.
The submission from Hyperliquid demonstrates the necessity of regulator-DeFi cooperation in order to establish safe, liquid, and easily accessible cryptocurrency markets.
Following their statement to the CFTC regarding regulations on perpetual swaps and 24/7 crypto trading, $HYPE token has surged by 15%, exceeding the larger crypto markets. A major market valuation milestone is reached when Hyperliquid surpasses Dogecoin in fully diluted valuation (FDV). Growing institutional interest, governmental actions, and well-known endorsements from prominent players in the bitcoin business have all contributed to this price spike.
A whale deposited 4 million USDC into $HYPE and shorted BTC 15 times. According to Onchain Lens monitoring, a whale deposited 4 million USDC into HyperLiquid and opened a BTC short position with 15x leverage.
Investor confidence has increased as a result of this development, highlighting how crucial regulatory compliance is to supporting market stability and growth. The market's response emphasises how important regulatory measures are in influencing investor sentiment and cryptocurrency valuations.
The CFTC's comments suggest a shift towards stricter regulations in the crypto derivatives market. This could significantly impact the market's decentralized nature and autonomy. As the market matures, regulatory bodies like the CFTC will actively shape crypto asset and derivative product conditions, crucial for investor protection and market sustainability.
Also read: Hrum Quote of the Day 23 May 2025: Reward 150 Coins
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