Kraken Parent Payward to Launch Regulated Perpetual Futures on Hyperliquid

Kraken parent to launch regulated futures on Hyperliquid

Hyperliquid has announced its intention to make Payward, the parent company of the Kraken crypto exchange, the first regulated entity to launch markets on its platform. This development is part of an effort to bring regulated perpetual futures to traders in the United States. A perpetual future is a type of contract that allows traders to bet on the price of an asset without the contract ever expiring.

Hyperliquid is a decentralized trading protocol, which is a system that uses blockchain technology to allow trading without a central authority. The platform is developing new features that would allow regulated companies to use its infrastructure while still following government rules.

Essential facts about the agreement

• Payward plans to use Hyperliquid’s HIP-3 markets to offer regulated products.
• Bitnomial, a firm regulated by the Commodity Futures Trading Commission (CFTC), will act as the market deployer and clearinghouse.
• NinjaTrader Clearing, another CFTC-registered firm, will manage the accounts for customers.
• The technology is currently being tested on a testnet, which is a trial version of the blockchain.

Official plans for U.S. market access

In a social media post, Hyperliquid described itself as a neutral infrastructure layer designed to support various parts of the financial system. The protocol noted that while it provides the technology, the companies that deploy the markets are responsible for controlling and managing them. Payward first formally announced its plans for this structure on September 16, following earlier reports that it was looking for ways to bring these trading products to the U.S. market.

How the HIP-3 technology enables restricted access

The move is made possible by an upgrade called HIP-3. This upgrade allows market creators to use "allowlists," which are digital lists that restrict who can access certain markets. This technology could allow regulated firms to offer products with specific limits, such as leverage restrictions, to ensure they meet legal requirements. Hyperliquid previously argued in a regulatory submission that this setup allows firms to operate regulated markets on top of a decentralized system.

What is confirmed and what is still unknown

It is confirmed that Hyperliquid intends for Payward and Bitnomial to lead this deployment and that the necessary tools are currently on the testnet. However, it remains unclear exactly how the permissioning system will work in practice. For example, the sources do not specify if the markets will include built-in Know Your Customer (KYC) checks, which are standard identity verification processes used by financial institutions.

Future steps for regulatory approval

The entire plan depends on receiving approval from regulators. While the technology is ready for testing, the formal deployment by Payward and Bitnomial cannot happen until the proper authorities give their consent. Bitnomial will handle the deployment, clearing, and settlement of the trades once the process is approved.

Sources

• The Block