The UK Financial Conduct Authority has issued a warning against Hyperliquid and Hyper Foundation, suggesting they may be offering financial services without proper authorization in the country. This regulatory action draws attention to the growing scrutiny of crypto perpetual futures, a product that has gained significant traction among traders.
According to the FCA notice, consumers should steer clear of the platform as it lacks the necessary approvals, which means it may not provide the protections typically associated with regulated financial services. The warning comes at a time when perpetual futures—contracts with no expiry date that use funding payments to track spot prices—are increasingly capturing the interest of both regulators and major exchange operators.
In a contrasting development, Jeffrey Sprecher, CEO of Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, revealed that his firm is examining Hyperliquid’s operational model and engaging with regulators to explore why traditional exchanges cannot offer similar products. This marks a notable shift in attitude from traditional finance toward the crypto derivatives space.
Meanwhile, CME Group CEO Terry Duffy has expressed skepticism about US-regulated crypto perpetual futures, arguing that the high leverage—sometimes up to 50x—and automatic liquidation mechanisms pose significant risks for retail investors. He described the market as overly speculative and questioned its long-term benefits.
Despite these concerns, the US Commodity Futures Trading Commission recently approved the first regulated crypto perpetual futures, opening the door for platforms like Kalshi to launch Bitcoin and Ethereum perps. Other firms, including Coinbase Financial Markets and Kraken, are also moving into the space, aiming to offer similar products to eligible clients.
Hyperliquid remains one of the largest decentralized venues for perpetual futures, having generated $255 million in revenue by May 20, with its HYPE token surging 101% year-to-date. This scale has made it a focal point for both regulators and traditional exchanges seeking to understand and potentially replicate its success.