Hyperliquid draws FCA warning while ICE explores its model

Hyperliquid has been flagged by the UK Financial Conduct Authority, bringing regulatory scrutiny to one of the largest crypto perpetual futures venues.

According to a notice published by the UK Financial Conduct Authority on May 21, Hyperliquid, Hyper Foundation, the protocol’s application, and related social media channels may be offering or promoting financial services and products in the United Kingdom without authorization.

The regulator stated that consumers should avoid dealing with the platform and warned that firms operating without approval may not provide the protections available through regulated financial services.

The FCA’s warning arrived as cryptocurrency perpetual futures, commonly known as perps, attract increasing attention from regulators, exchanges, and trading firms.

Unlike traditional futures contracts, perpetual futures have no expiration date and rely on recurring funding payments to keep prices aligned with spot markets.

At the same time, major operators of regulated exchanges have begun discussing whether similar products could gain a larger foothold in traditional financial markets.

Traditional exchanges are studying perpetual futures

Speaking at Piper Sandler’s Global Exchange & Fintech conference on June 4, CME Group Chief Executive Terry Duffy criticized the Commodity Futures Trading Commission’s decision to allow regulated crypto perpetual futures in the U.S.

Duffy argued that the highly leveraged products introduce risks that many market participants may underestimate. He said perpetual futures can allow traders to maintain positions indefinitely while using leverage that may reach 50 times the deposited capital.

According to Duffy, automatic liquidation mechanisms and funding-rate costs could expose retail investors to significant losses if they do not fully understand how the products function.

Describing the market as increasingly driven by speculation, Duffy questioned whether the new contracts serve the long-term interests of investors.

While CME’s chief executive voiced concerns, Intercontinental Exchange Chief Executive Jeffrey Sprecher took a different approach. During remarks made last week, Sprecher said the parent company of the New York Stock Exchange was studying Hyperliquid’s model and discussing with regulators why traditional venues could not offer comparable products.

Those comments emerged as regulated crypto perpetual futures began entering the U.S. market. On May 29, the CFTC approved the first regulated crypto perpetual futures products for U.S. participants, opening a market that had previously been dominated by offshore platforms.

U.S. firms move into a market long led by offshore venues

Following the regulatory approval, prediction market operator Kalshi launched Bitcoin perpetual futures and introduced Ethereum perpetual futures on June 4.

According to regulatory filings, another 11 cryptocurrency perpetual futures contracts, including products tied to Solana and Dogecoin, remain under review.

Elsewhere in the sector, Coinbase Financial Markets received regulatory guidance allowing eligible institutional clients in the United States to access perpetual futures and options listed on Deribit, the derivatives exchange acquired by Coinbase in 2025.

Kraken has also announced plans to offer regulated Bitcoin perpetual futures through Bitnomial Exchange, a regulated platform acquired by parent company Payward earlier this year.

Against that backdrop, Hyperliquid remains one of the largest decentralized venues for perpetual futures trading.

The platform’s scale has made it increasingly difficult for regulators and traditional exchanges to ignore. By May 20, Hyperliquid had generated $255 million in revenue for the year, according to reported figures, while the HYPE token had gained 101% over the same period.