The Intercontinental Exchange (ICE) and the Chicago Mercantile Exchange Group (CME) are actively lobbying the US Congress and the Commodity Futures Trading Commission (CFTC) to impose typical financial institution regulations on the Hyperliquid decentralized exchange.
The two traditional exchanges now agree that Hyperliquid’s anonymous and unregulated trading environment poses systemic financial risks. The pair specifically targets the exchange’s 24/7 crude oil perpetual contracts launched under the HIP-3 upgrade.
Hyperliquid’s growth and regulatory stand
According to the cryptocurrency intelligence provider Kaiko, the cumulative trading volume of these contracts skyrocketed from $339 million in late February to over $7.3 billion on March 12.
Even more, the exchange now captures 34% – 44% of the decentralized derivatives market share, with $619 billion in trading volume in Q1 2026. Hyperliquid’s massive growth is rooted in the rise of real-world asset (RWA) offerings, particularly crude oil contracts.
That said, the platform remains globally unregulated due to its decentralized nature. Additionally, the exchange does not enforce Know Your Customer (KYC) or Anti-Money Laundering (AML) frameworks like its centralized counterparts do. These CME and ICE allege that these features promote insider trading, market manipulation, and sanctions evasion.
However, to prevent regulator conflict, Hyperliquid’s front-end interface geofences access from specific jurisdictions, including the US, Ontario (Canada), and OFAC-sanctioned countries. Furthermore, the Hyper Foundation, a major developer of the platform, launched the Hyperliquid Policy Center in February. It aims to work collaboratively with lawmakers to develop regulations that do not compromise Hyperliquid’s self-custodial nature.
Killing the competition
Notably, CME is the world’s largest financial derivatives marketplace, with ICE as its primary global rival. Critics argue that the move against Hyperliquid aims to neutralize a fast-growing competitor while deflecting their own regulatory scrutiny.
Both institutions are currently facing parallel investigations by the CFTC and the Department of Justice (DoJ) regarding well-timed, highly opportune oil futures trades executed on their platforms shortly before federal policy announcements.
ICE could also be looking to eliminate the threat to its $2 billion stake in Polymarket following Hyperliquid’s prediction market launch in the HIP-4 upgrade.
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