Hyperliquid Urges SEC to Regulate Pre-IPO Perpetuals
Hyperliquid Pushes SEC for Rules on Pre-IPO Perpetual Contracts
The Hyperliquid Policy Center and Trade[XYZ] have asked U.S. regulators to establish a clearer framework for pre-IPO perpetual contracts, a growing category of derivatives designed to provide markets with price exposure to companies before they go public.
The two organizations submitted a joint comment letter to the U.S. Securities and Exchange Commission on August 18, 2026, responding to SEC Chairman Paul Atkins' May 2026 request for ideas on how to improve the initial public offering process.
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| Source: Official Letter |
Hyperliquid Groups Seek Regulatory Framework
The Hyperliquid Policy Center describes itself as an independent research organization focused on regulated access to onchain markets, including markets operating through Hyperliquid.
Trade[XYZ] is the largest deployer operating under Hyperliquid Improvement Proposal 3, commonly known as HIP-3. The framework allows independent developers to create perpetual markets on the Hyperliquid blockchain.
The joint letter was addressed to Vanessa Countryman, Secretary of the Commission, and centers on creating a regulatory framework specifically designed for pre-IPO perpetual contracts.
The organizations argue that these products could provide an alternative mechanism for discovering prices before a company's shares begin trading publicly.
Why Pre-IPO Pricing Is a Focus
The letter points to significant differences between IPO pricing and the prices at which stocks begin trading on public exchanges.
According to the filing, the number of U.S. public companies has declined by about 40 percent since the mid-1990s, falling from more than 7,800 to roughly 4,700.
The groups also cited several recent examples of substantial gaps between IPO pricing and opening-market prices.
Cerebras priced its IPO at $185 before opening at $350. SpaceX priced at $135 and opened at $150, while SK Hynix priced at $149 and opened at $170.
The letter also cited China's CXMT, which priced its Shanghai listing at 8.66 yuan, or approximately $1.28, before opening at 49.50 yuan, about $7.31. That represented a 472 percent increase from the offering price.
The groups argue that these price differences represent potential value that could otherwise be captured through additional market mechanisms.
Trade[XYZ] Highlights IPOP Results
Trade[XYZ] also presented historical data involving its IPOP markets.
For Cerebras, the IPOP remained active for 13 days before the company's May 14, 2026 listing, with the final IPOP price coming within 2.24% of the opening price.
For Quantinuum, the IPOP lasted 7 days before its June 4, 2026 listing, ending within 7.23% of the opening price.
The SpaceX IPOP operated for 25 days ahead of the June 12, 2026 listing and finished within 5.06% of the opening price.
An IPOP for SK Hynix lasted only 1 day before its July 10, 2026 listing and finished within 0.44% of the opening price.
For CXMT, the IPOP ran for 12 days before its July 27, 2026 listing, with the final price landing within 2.74% of the opening price.
The figures were cited from the official letter.
Five Areas the SEC Is Being Asked to Review
The joint submission outlines five areas where the SEC could potentially establish rules for IPOPs.
First, regulators would need to determine how equity-linked perpetual contracts should be classified, including whether they qualify as security futures or security-based swaps.
Second, the organizations called for a disclosure framework tailored to the mechanics of these derivatives rather than traditional equity ownership.
Third, they proposed listing eligibility requirements connected to the issuer's IPO filing process.
Fourth, the groups want market-integrity standards covering issues such as preannounced oracles and settlement mechanisms.
Finally, they proposed a phased approach toward investor access, potentially expanding participation over time.
For now, IPOPs remain unavailable to U.S. persons. Trade[XYZ] says it uses geoblocking and wallet screening for U.S. and other restricted users.
Hyperliquid Trading Activity Draws Attention
The proposal comes as activity across HIP-3 markets continues to expand.
According to data cited in the letter from the ASXN-Hyperliquid dashboard, HIP-3 markets have processed more than $450 billion in cumulative trading volume and maintain close to $4 billion in open interest.
The scale of that activity has increased attention on the regulatory treatment of blockchain-based derivatives.
The letter also references a March 2026 SEC-CFTC memorandum of understanding focused on harmonizing derivative-product oversight.
It further points to a May 29, 2026 CFTC order approving the first perpetual futures contract listed on a U.S. exchange.
Both agencies have identified equity-linked perpetual products as an area requiring coordinated regulatory consideration.
HYPE Price on August 19, 2026
Hyperliquid's native HYPE token was trading around $58.17 on August 19, 2026, according to CoinMarketCap data cited in the original report.
The token was down 2.89 percent over 24 hours, while its 24-hour trading volume stood near $256.2 million.
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| Source: CoinMarketCap Chart |
Note: Price data is sourced from a CoinMarketCap chart at the time of writing (August 19, 2026) and changes continuously , figures may differ when you read this article.
HYPE had a market capitalization of approximately $14.68 billion and a fully diluted valuation of roughly $55.4 billion.
Its circulating supply was approximately 252.51 million HYPE, compared with total or maximum supply of 952.57 million HYPE.
These market figures provide context for the size of the ecosystem surrounding the proposed regulatory discussion.
What Happens Next?
The joint filing does not guarantee that the SEC will approve or adopt a regulatory framework for IPOPs.
Instead, it represents a formal request for regulators to examine how these products should be classified and supervised.
The SEC and CFTC would need to address questions involving investor protection, market integrity, derivatives regulation and the relationship between private companies and blockchain-based price markets.
For Hyperliquid and Trade[XYZ], regulatory clarity could potentially determine how quickly pre-IPO perpetual markets can develop within a compliant U.S. framework.
Conclusion
The Hyperliquid Policy Center and Trade[XYZ] submitted a joint letter to the SEC on August 18, 2026, calling for a regulatory framework covering pre-IPO perpetual contracts, or IPOPs.
The organizations highlighted substantial differences between IPO prices and opening-market prices and pointed to IPOP data involving Cerebras, Quantinuum, SpaceX, SK Hynix and CXMT.
Their proposal covers product classification, disclosures, listing requirements, market integrity and phased investor access.
For now, IPOPs remain unavailable to U.S. persons. The SEC has not announced any regulatory approval resulting from the filing.
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Crypto Market Analyst & Onchain Storyteller
Barland Vex is a veteran crypto writer who treats the chaos of digital markets as his playground. With a sharp instinct for reading Bitcoin's movements, DeFi waves, and the narratives that move millions of dollars in a matter of hours, Vex delivers analysis that's always one step ahead of the market itself.