Hyperliquid Policy Center Urges CFTC to Open Compliance Channels for Decentralized Prediction Markets

Odaily Planet Daily News The Hyperliquid Policy Center (HPC) has announced the formal submission of a comment letter in response to the Commodity Futures Trading Commission's (CFTC) Advance Notice of Proposed Rulemaking (ANPRM) on prediction markets. The HPC advocates for establishing clear compliance pathways for decentralized prediction markets operating on public, permissionless blockchains, while also refining the regulatory framework for centralized prediction markets.

In its comment letter, the HPC calls on the CFTC to develop more flexible, function-oriented rules that can accommodate decentralized market structures. It requests clear legal channels for US market participants to access decentralized prediction markets and urges the US to maintain its leading position in decentralized financial innovation.

The HPC states that prediction markets are a natural extension of the federal derivatives framework, helping participants directly manage economic risk exposure to real-world events. By aggregating dispersed information through continuously updated market prices, prediction markets have demonstrated price discovery capabilities that have been widely validated, even outperforming traditional polls and expert forecasts.

The letter points out that decentralized prediction markets built on public blockchains offer advantages such as transparency, non-custodial operation, and high resilience. They do not rely on centralized operators holding user funds and eliminate single points of failure. All transactions are recorded in real-time on a public ledger, facilitating regulatory oversight and market surveillance, while market access standards are more transparent and uniform.

The HPC emphasizes that current rulemaking should not codify dependence on a single exchange operator, custodial intermediary, or traditional settlement monitoring mechanisms, as this would hinder US users' legal participation in decentralized prediction markets. It states that it will continue to promote compliant access for US market participants to Hyperliquid and HIP-4 outcome markets, and will maintain communication with the CFTC.