Hyperliquid co-founder Jeff Yan says trading service providers, not the blockchain itself, should be regulated
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AT A GLANCE
Hyperliquid co-founder Jeff Yan recommends regulating service providers operating markets rather than the blockchain itself.
Article
Hyperliquid founder proposes new regulatory approach: regulate trading service providers, not the blockchain itself
BlockBeats reported that October 15, Hyperliquid co-founder Jeff Yan said in an interview with Bloomberg’s “Odd Lots” podcast that regulatory obligations should be imposed on financial service providers operating markets on the Hyperliquid blockchain, rather than on the blockchain network itself, to reduce the compliance burden of entering the U.S. market.
Yan compared this approach to internet infrastructure: As underlying liquidity and trading infrastructure, the blockchain should not directly bear all the regulatory responsibilities of traditional trading platforms. Instead, compliance obligations should be fulfilled by service providers that actually operate the markets and control the relevant functions.
Yan said Hyperliquid does not seek to replace traditional Wall Street financial institutions, but hopes to provide them with underlying trading technology, similar to Amazon Web Services (AWS) providing computing infrastructure to enterprises. He said the team is seriously pursuing the development of Hyperliquid into infrastructure covering various financial markets. Hyperliquid currently remains unavailable to U.S. users, but Kraken parent company Payward has already planned to use its technology to provide derivatives services to U.S. investors through a regulated trading platform.
Original link https://m.theblockbeats.info/flash/372001
Key points
01
October 15, Hyperliquid co-founder Jeff Yan said in an interview with Bloomberg’s “Odd Lots” podcast that regulatory obligations should be imposed on financial service providers operating markets on the Hyperliquid blockchain.
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Jeff Yan compared this approach to internet infrastructure, arguing that the blockchain should not directly bear all the regulatory responsibilities of traditional trading platforms.
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Hyperliquid said it hopes to provide underlying trading technology rather than replace traditional Wall Street financial institutions.
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Hyperliquid is still not available to U.S. users.
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Payward, the parent company of Kraken, has planned to use Hyperliquid technology to provide derivatives services to U.S. investors through a regulated trading platform.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
This is a proposed division of regulatory responsibilities: The blockchain provides underlying technology and liquidity, while financial service providers that actually operate the markets assume compliance obligations. The material also states that Hyperliquid has not yet opened access to U.S. users and that Payward plans to explore providing related derivatives services through a regulated platform.
Why it matters to readers
If relevant partnerships and products obtain regulatory approval in the future, this could affect Hyperliquid’s path to entering the U.S. market and expanding its financial market infrastructure.
The key point is to distinguish between the underlying blockchain network and service providers operating trading markets: The former provides the technology, while the latter may bear compliance responsibilities toward users and regulators.
Risks and unknowns
This is Jeff Yan’s regulatory view expressed on a podcast and does not mean that regulators have accepted this division of responsibilities.
The material does not provide the original Bloomberg “Odd Lots” interview or regulatory approval documents.
It remains unclear whether Payward’s plan will result in a product being launched, approved, and made available.
It remains unclear when, or whether, Hyperliquid will become available to U.S. users.
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