Hyperliquid Policy Center Sends Letter to CFTC: Advocating for Compliant Pathways for Decentralized Prediction Markets

Odaily Odaily reports that 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 letter advocates for establishing clear compliance pathways for decentralized prediction markets built on public, permissionless blockchains, while simultaneously improving 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; to establish clear legal channels for U.S. market participants to access decentralized prediction markets; and to help maintain U.S. leadership in decentralized finance innovation.

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

It 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 to hold user funds and are not subject to single points of failure risk. 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 solidify reliance on single exchange operators, custodial intermediaries, and traditional settlement monitoring mechanisms; doing so would hinder U.S. users' legal participation in decentralized prediction markets. It states that it will continue to promote compliant access to Hyperliquid and HIP-4 outcome markets for U.S. market participants and will maintain ongoing communication with the CFTC.