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Hyperliquid’s policy arm praised SEC Chair Paul Atkins’ four-point plan to bring on-chain markets under clearer regulatory rules, arguing the approach better fits how distributed ledger systems operate today.
Jake Chervinsky’s Hyperliquid Policy Center said Atkins “gets it,” highlighting the chair’s goal of mapping blockchain systems onto existing securities law rather than forcing legacy categories onto new technology. The center framed the plan as a shift away from an enforcement-first approach that has dominated recent years.
Atkins focused on how the SEC should apply its definition of an “exchange” to trading systems that do not rely on a central order book. He proposed notice-and-comment rulemaking to clarify how protocols that match trades on-chain fit within the Securities Exchange Act framework.
Atkins also addressed broker-dealer regulations, noting that on-chain interfaces can blur the line between software and traditional brokerage. He pointed to recent SEC staff statements on software interfaces and argued for exemptive rulemaking to define what constitutes dealer activity when code performs functions instead of people.
Clearing agencies were another focus. Atkins proposed rulemaking to define what “clearing agency” means when settlement occurs on a blockchain, where settlement can happen in seconds without intermediaries holding assets during a settlement period.
Atkins discussed crypto vaults as on-chain applications that let users earn yield by deploying assets into different opportunities. He said the SEC needs to work through Securities Act and Advisers Act issues, noting that vaults often resemble investment products but are implemented as smart contracts with no human management.
Hyperliquid’s Policy Center said Atkins’ approach treats on-chain clearing and settlement as a major financial innovation rather than a compliance problem to be forced into outdated structures. It argued that regulators should recognize that blockchain systems are built differently and should be mapped to existing frameworks instead of being treated as traditional exchanges with added steps.
When the news broke, HYPE traded at $42.98, up 2% over 24 hours. The token remains 27% below its all-time high of $59 from last year.
The proposals target a central regulatory tension: on-chain systems operate without CEOs, compliance departments, or traditional intermediaries, with code executing trades, settlement, and risk management. The Policy Center suggested that forcing these systems into broker-dealer or exchange categories designed for human intermediaries creates practical problems.
Atkins also called on Congress to pass the CLARITY Act. The Policy Center said SEC rulemaking could help, but statutory language would provide stronger protection against future regulatory reversals. It argued that without legislation, the next SEC chair could undo rulemaking through changes in interpretation.
The vault discussion was also framed as critical for DeFi, including yield farming, liquid staking, and lending protocols. The article noted that millions of users deploy assets into these systems daily, and that treating every vault as an unregistered security or investment contract could significantly disrupt how DeFi operates.
Hyperliquid was cited as an example of a platform that runs a perpetual futures exchange on its own Layer 1 blockchain, handling billions in trading volume without traditional intermediaries. The Policy Center said its interest in Atkins’ proposals is tied to the need for regulatory clarity to operate long-term in the U.S.
The article said notice-and-comment rulemaking would require the SEC to publish proposed rules, accept public feedback, and justify final decisions. It described this as slower than enforcement actions but potentially more predictable for industry participants, who can weigh in before rules are finalized.
Hyperliquid’s Policy Center characterized Atkins’ plan as an attempt to align on-chain systems with existing legal frameworks without imposing outdated categories. It argued that clearer rules could reduce uncertainty for crypto projects building in the U.S., while also emphasizing that Congress would need to act through legislation such as the CLARITY Act to make changes harder to reverse.
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