Jeff Yan Urges U.S. to Regulate Hyperliquid Market Operators

Hyperliquid founder Jeff Yan is urging U.S. regulators to place compliance duties on firms that operate markets using the blockchain, rather than treating the underlying network as an exchange. His proposal is a preferred regulatory approach, not an existing U.S. legal classification, and regulators have not been reported to adopt it. Yan made the argument in remarks reported from a Bloomberg interview and an appearance on the Odd Lots podcast. He said oversight should apply where firms exercise control, including businesses that create, deploy or operate financial markets on Hyperliquid. Under that approach, individual operators would be responsible for compliance related to their activities, while the blockchain could serve as shared infrastructure for multiple services. The distinction reflects a broader regulatory question: how rules should apply when financial services run on blockchain networks, where infrastructure and market operators may be separate. Yan has argued that firms using the technology could build regulated trading services without requiring the underlying network itself to function as a regulated exchange. He also said the technology could benefit...