Hyperliquid Policy Center Fires Off CFTC Letter On Prediction Markets—Here’s What It Wants

The newly launched Hyperliquid Policy Center (HPC) has entered the US prediction market debate with a fresh submission to the Commodity Futures Trading Commission (CFTC). 

The Washington, D.C.-based non-profit, led by Jake Chervinsky, said it responded to the CFTC’s request for public input following an Advance Notice of Proposed Rulemaking on Prediction Markets (the “ANPRM”). 

Hyperliquid Policy Center Lays Out Its Case To CFTC

In its comment letter, filed on Thursday, HPC urges the CFTC to adopt a flexible, function-based approach so the regulatory framework can account for decentralized market designs. 

HPC also asked for an explicit path for US participants to access decentralized prediction markets, while emphasizing the importance of encouraging American leadership in decentralized financial innovation.

The policy center framed prediction markets as part of a broader US derivatives tradition. It noted that federal derivatives laws exist to support price discovery across commodities and to help producers and consumers plan and hedge risk. 

In that context, HPC argued that public, market-based prices function as “a public good” because they aggregate scattered information, produce signals that can support decisions in economic and political settings, and can outperform less structured approaches. 

The group added that prediction market pricing already influences prediction platforms, saying its data is integrated into major trading terminals, financial and news outlets, and social media.

In its view, decentralized prediction markets bring advantages rooted in design choices rather than operator discretion. The center described decentralized markets as transparent and non-custodial, with built-in operational resilience. 

Finally, HPC pointed to the idea that market data and collateral can be composed directly with other on-chain components, including smart contract environments and trading and risk management protocols.

HIP-4 Testing Meets Washington Push

According to the letter, those characteristics help advance regulatory objectives that the CFTC has discussed in relation to centralized prediction markets, including impartial access, settlement integrity, customer protection, and effective market surveillance. 

HPC emphasized, however, that rulemaking aimed at centralized structures should not inadvertently lock in assumptions that only a single exchange operator can exist at the center of the system, or that surveillance and settlement mechanics must be structured around a traditional operator model. 

The policy center said enabling access to decentralized prediction markets in the United States will require additional steps beyond the ANPRM process, but it argued the CFTC still has an opportunity to shape that access pathway.

The Hyperliquid Policy Center’s move comes amid broader industry activity around Hyperliquid. The policy center’s letter follows a new proposal reported by NewsBTC on Wednesday, describing Hyperliquid testing a system upgrade called HIP-4. 

The reported upgrade is intended to enable traders to bet on real-world outcomes on a platform that has drawn attention for rapid and aggressive expansion.

As of this writing, Hyperliquid’s native token, HYPE, was trading at $39, marking a 6% loss over the past week. 

Featured image from OpenArt, chart from TradingView.com