Hyperliquid Policy Center Sends Letter to CFTC: Should Open Compliance Channels for Decentralized Prediction Markets

Odaily Planet Daily News The Hyperliquid Policy Center (HPC) announced that it has formally submitted a comment letter regarding the Commodity Futures Trading Commission's (CFTC) Advance Notice of Proposed Rulemaking (ANPRM) on prediction markets. The letter advocates for improving the regulatory framework for centralized prediction markets while establishing clear compliance pathways for decentralized prediction markets built on public, permissionless blockchains.

In its comment letter, the HPC called on the CFTC to develop more flexible, function-oriented rules that can adapt to decentralized market structures; establish clear legal channels for U.S. market participants to access decentralized prediction markets; and promote U.S. leadership in the field of decentralized financial innovation.

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

It pointed out that decentralized prediction markets based 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 have no single point of failure risk. All transactions are recorded in real-time on a public ledger, facilitating regulatory and market oversight, while market access standards are more transparent and uniform.

The HPC emphasized that current rulemaking should not solidify reliance on single exchange operators, custodial intermediaries, and traditional settlement monitoring mechanisms, as doing so would prevent U.S. users from legally participating in decentralized prediction markets. It stated that it will continue to promote compliant access for U.S. market participants to Hyperliquid and HIP-4 outcome markets, and will maintain communication with the CFTC.