Hyperliquid Faces UK FCA Warning Over Perps Activity

TLDR

• UK FCA issued a May 21 warning naming Hyperliquid and Hyper Foundation.
• The regulator said the platform may promote services in the UK without authorization.
• Hyperliquid generated $255 million in year-to-date revenue by May 20.
• The HYPE token surged 101% during the same period.
• CME CEO Terry Duffy warned crypto perps could become a “disaster waiting to happen.”

Hyperliquid has come under regulatory focus after the UK FCA issued a public warning about the platform’s status. The regulator said Hyperliquid and related entities may offer services in the United Kingdom without permission. At the same time, U.S. officials and exchange executives raised concerns about crypto perpetual futures products.

UK FCA Flags Hyperliquid and Related Entities

The UK Financial Conduct Authority published a notice dated May 21 naming Hyperliquid and Hyper Foundation. The UK FCA said the protocol’s app and social media channels may promote financial services without authorization. The regulator warned users to “avoid dealing” with the platform.

The notice stated that Hyperliquid “may be providing or promoting financial services or products” in the UK. However, the alert drew limited attention until it appeared more prominently in online search results this week. The update renewed focus on how offshore crypto derivatives venues operate in the UK market.

Hyperliquid operates as a decentralized venue for perpetual futures, also known as perps. Perps allow traders to use leverage and hold positions without an expiry date. Unlike traditional futures, these contracts rely on funding payments to align prices with spot markets.

By May 20, Hyperliquid reportedly generated $255 million in revenue this year. During the same period, its HYPE token rose 101%. The platform ranks among the largest decentralized perps venues by trading activity.

Matthew Pinnock, COO of Altura DeFi, said crypto perps now dominate directional trading in digital assets. He stated that volumes on venues such as Hyperliquid make them “impossible” to treat as peripheral. He added that regulators now track the role perps play in price discovery.

U.S. Exchanges Debate Crypto Perpetual Futures

In the United States, exchange leaders raised concerns about expanding access to crypto perps. CME Group CEO Terry Duffy described crypto perps as “a disaster waiting to happen.” He criticized regulators for approving what he called a “novel and complex” product.

Duffy said speculation has replaced core market functions in some areas. He also questioned the CFTC’s approval process for new crypto derivatives. Reuters reported his remarks during a recent industry conference.

Intercontinental Exchange CEO Jeffrey Sprecher said the NYSE parent studies Hyperliquid’s model. He said the exchange has asked regulators why traditional venues cannot list similar products. His comments followed broader discussions about regulated crypto derivatives.

Two days after Sprecher’s remarks, the CFTC approved Kalshi to offer Bitcoin perpetual futures. The approval marked a step toward regulated perps products in the U.S. market. Meanwhile, the UK FCA’s May 21 notice on Hyperliquid remains active on its website.

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