Hyperliquid and CME split over where US compliance obligations should lie
A dispute over who builds the rails
Hyperliquid founder Jeff Yan and CME Group CEO Terry Duffy have publicly disagreed on how U.S. financial regulations should apply to decentralized trading platforms. The debate centers on whether compliance obligations should fall on the companies that deploy markets on a blockchain, or on the blockchain infrastructure itself.
This split is happening while Hyperliquid continues to prohibit U.S. users from accessing its platform.
The core disagreement
- Yan argues that regulations target the firms operating markets, not the underlying network or protocol.
- Duffy argues that an institution has a duty to police markets and cannot outsource oversight to users.
- Yan compares the blockchain to internet protocols, which support financial apps without being regulated as the apps themselves.
- Duffy raises concerns about know-your-customer checks and the risks of highly leveraged positions causing cascading liquidations.
What the company says
Hyperliquid's terms of use remain unchanged for its website interface, app.hyperliquid.xyz. The terms explicitly ban individuals residing in or located in the United States from using the site. Using VPNs or proxies to hide a U.S. location is also prohibited.
Yan stated that the terms distinguish the company-provided website interface from the permissionless blockchain. He noted that the website is not the only way to access the network, but it is the only part governed by these specific location restrictions.
What is confirmed
It is confirmed that Hyperliquid currently bars U.S.-based users from its hosted interface. The platform's documents state that neither the interface nor the underlying blockchain is registered with any U.S. government authority or regulatory body.
President Donald Trump previously stated that the Commodity Futures Trading Commission was working to bring Hyperliquid into the U.S. legally. No official confirmation has been announced that this process is complete.
Why this matters
This debate highlights a gap in how traditional regulators view decentralized networks. The definition of who holds legal responsibility—a software protocol or a user-deployed application—remains an unresolved question for bringing such platforms into U.S. markets.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.