Hyperliquid Advocates for Decentralized Prediction Market Regulation

Hyperliquid Policy Center (HPC) has submitted a formal opinion letter regarding the U.S. Commodity Futures Trading Commission's (CFTC) Advance Notice of Proposed Rulemaking (ANPRM) on prediction markets. According to Odaily, HPC is advocating for the establishment of a clear compliance path for decentralized prediction markets based on public, permissionless blockchains, while improving the regulatory framework for centralized prediction markets. In its letter, HPC urges the CFTC to develop more flexible, function-oriented rules to accommodate decentralized market structures. It calls for the creation of clear legal channels for U.S. market participants to access decentralized prediction markets and aims to maintain the country's leadership in decentralized financial innovation. HPC argues that prediction markets are a natural extension of the federal derivatives framework, allowing participants to directly manage economic risk exposure to real-world events. These markets aggregate dispersed information through continuously updated market prices, demonstrating superior price discovery capabilities compared to traditional polls and expert forecasts. The center highlights the advantages of decentralized prediction markets based on public blockchains, such as transparency, non-custodial operations, and high resilience. These markets do not rely on centralized operators holding user funds and eliminate single-point-of-failure risks. All transactions are recorded in real-time on public ledgers, facilitating regulatory oversight and market supervision, with more transparent and unified market access standards. HPC emphasizes that current rulemaking should not reinforce dependence on single exchange operators, custodial intermediaries, and traditional settlement monitoring mechanisms, as this would hinder U.S. users' legal participation in decentralized prediction markets. HPC states its commitment to promoting compliant access for U.S. market participants to Hyperliquid and HIP-4 outcome markets, while continuing communication with the CFTC.