Sep 4, 2026 · 32 min
Crypto perpetuals expose gaps in legacy derivatives rules
Why the Question Over How to Regulate Perps Has Turned Into a Fight
The classification of perpetual contracts could determine where they trade, which regulators oversee them, and whether U.S. retail users can access them.
- 1Perpetuals sit uneasily between futures and swaps, making classification consequential for venues, jurisdiction, and retail access.
- 2On-chain markets combine financial products with software, challenging rules built around centralized exchanges and intermediaries.
- 3The Hyperliquid discussion shows that bringing public-blockchain markets onshore raises unresolved questions about settlement, clearing, compliance, and control.
Don't miss
The panel’s discussion of Hyperliquid’s possible U.S. expansion crystallizes the unresolved questions around trading, settlement, clearing, compliance, and regulatory control.
The brief
Crypto perpetuals are not merely a new product category: whether regulators call them futures or swaps affects venue requirements, jurisdiction, and retail access.
Jake Chervinsky, Tiffany Smith, and Cathy Yoon examine whether rules built for intermediary-run exchanges can govern markets where smart contracts handle trading and settlement.
The panel treats Hyperliquid’s possible U.S. expansion as a stress test, raising practical questions about clearing, compliance, regulators, and the role of public blockchains.
Cathy Yoon argues that public blockchains can function as communication infrastructure rather than exchanges, complicating the case for treating networks without centralized control as intermediaries.
The closing argument is less about choosing between old labels than designing rules around how on-chain systems actually work, including risks software alone cannot remove.
What was said on this episode
21 statements · 18 positive · 1 negative · 2 neutral
Perpetuals are highly useful derivatives and should be classified as futures for broad U.S. access.
“my view... and the view of the Hyperliquid Policy Center is that they are an extraordinarily useful tool and a better derivative in many cases for many users than David Futures or Options and should be available to the broadest number of people, end users, and hedgers and speculators in the U.S. And for that reason, they should be classified as futures.”
Listen at 3:39
Perpetual contracts legally fit better within the futures category.
“they do really fall more into the bucket of futures”
Listen at 4:08
Perpetual futures share swap and futures characteristics, but futures is the better category.
“they have really had characteristics of both. But I think the future is a better category for them.”
Listen at 4:41
Smart-contract-based perpetual trading is more venue-focused than bilateral swap activity.
“I look at that as more being more venue focused than something that is more bilateral that you would see in swaps”
Listen at 6:06
Smart-contract markets may democratize access to financial products.
“hopefully it's more of... leaning more towards democratization of having access to these financial products”
Listen at 6:42
The CFTC authorized centralized exchanges to trade perpetual futures classified as futures.
“the CFTC has authorized the trading of perpetual futures and has classified them as futures for centralized exchanges”
Listen at 9:05
On-chain markets do not necessarily require intermediaries.
“with on-chain markets, you don't necessarily need an intermediary”
Listen at 10:59
Financial markets are moving toward on-chain operation, but remain at an early stage.
“I think we are actually moving towards on-chain markets, but we're just in the very, very beginning stages of getting to that reality.”
Listen at 11:50
CME’s effort to preserve its current position is short-sighted.
“I think it's a little short-sighted of the CME to even try to hold on to their current position”
Listen at 12:37
Perpetuals are better derivatives for many use cases than alternatives.
“perpetuals are in so many ways just a better derivative for many use cases”
Listen at 14:05
Perpetuals avoid expiration-date fragmentation and therefore provide deeper liquidity.
“They don't have fragmented liquidity across many expiration dates, so they have much deeper liquidity.”
Listen at 14:10
Perpetuals are simpler because they closely track their underlying asset’s price.
“They're a much simpler instrument to use because they very closely track the price of the underlying asset”
Listen at 14:16
Digital and non-digital underlying assets do not otherwise change derivative legal treatment.
“there really isn't any difference in terms of the legal treatment”
Listen at 15:04
The CFTC should evaluate perpetuals on physical commodities individually and cautiously.
“totally appropriate for the CFTC to take these assets one at a time and not move fast and break things”
Listen at 15:59
Hyperliquid is infrastructure usable by exchanges, not itself an exchange.
“Hyperliquid is not an exchange. Hyperliquid is infrastructure that any exchange can use in order to offer the best product or service to their customers.”
Listen at 22:53
Exchanges should use Hyperliquid to provide better customer products or services.
“You should be using Hyperliquid because it will enable you to offer a better product or service to your customer.”
Listen at 23:07
Public blockchains such as Hyperliquid and Solana should be viewed as communication lines, not exchanges.
“if you think of the hyperliquids and solanmas of the world as just pure communication lines, it's inappropriate to think of them as exchanges.”
Listen at 24:03
Smart contracts should not be treated as exchanges because they lack control.
“It's inappropriate to think that a smart contract is an exchange because there is no control.”
Listen at 24:16
On-chain markets may address intermediary-related financial risk through software instead of regulation.
“viewing intermediaries as introducing risk into the financial system and viewing on-chain markets as a way to address that risk through software rather than through regulation”
Listen at 27:07
U.S. on-chain markets will initially offer perpetual futures through existing regulatory frameworks.
“we will start by having these products, perpetual futures, offered through the regulatory framework that the agency administers.”
Listen at 29:03
Regulators will authorize intermediaries to use better technology for improved services.
“we will see those intermediaries authorized to use better technology in order to improve the product and service that they offer.”
Listen at 29:11
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.