Hyperliquid, tradeXYZ urge CFTC to approve energy perpetuals after $500B volume

Hyperliquid Policy Center and tradeXYZ want the CFTC to create a regulatory path for 24/7 energy perpetual contracts, citing $500 billion in on-chain trading volume.

Hyperliquid Policy Center and tradeXYZ asked the CFTC on Aug. 26 to create a regulatory framework for 24/7 energy perpetual contracts tied to WTI crude, Brent crude and Henry Hub natural gas.

The joint letter, published on the Hyperliquid Policy Center's website, argues that perpetual contracts — which have no expiry date and use funding payments to track underlying benchmarks — could improve hedging and price discovery during periods when traditional futures markets are closed. tradeXYZ has operated perpetual markets on Hyperliquid since October 2025, recording more than $500 billion in cumulative trading volume, Bloomberg reported.

The filing points to the Middle East conflict that disrupted energy exports starting Feb. 28, when U.S. oil futures were closed during part of the initial shock. Oil-linked perpetual contracts on Hyperliquid continued trading through the weekend, with about two-thirds of the oil price move between Friday's close and Sunday's reopening already reflected in on-chain markets, the groups said. Research cited in the filing found that during nearly 75 percent of weekend closures studied, crude perpetual prices finished closer to Sunday's reopening price than the benchmark's previous Friday close.

The CFTC allowed the first regulated perpetual futures linked to digital assets in May, but that decision was limited to Bitcoin and similar assets. The agency has said other asset classes, including energy, will be reviewed separately. The groups argue energy perpetuals could be permitted under the existing Commodity Exchange Act without new legislation.

Stablecoin Margin and On-Chain Clearing Among Key Asks

The proposal covers three specific requests. First, the groups want the CFTC to establish rules for 24/7 market operations, including how terms such as "business day" would apply to markets that operate continuously. Second, they propose allowing stablecoins and tokenized traditional assets to serve as margin for cleared derivatives — assets that can move outside normal banking hours, making them suitable for around-the-clock markets. Third, they ask regulators to permit on-chain systems for trading, margin, clearing, settlement and recordkeeping when those systems meet existing CFTC requirements.

The groups also proposed leverage caps by commodity and additional safeguards designed to protect market integrity, acknowledging risks including thin weekend liquidity and cascading liquidations. They said perpetual contracts should trade alongside standard futures rather than replace them, with dated futures continuing to serve traders who need specific delivery months or physical settlement.

What's at Stake for U.S. Derivatives

Continuous trading could give airlines, refiners, funds and other businesses another way to manage sudden changes in energy prices. These firms could adjust their exposure without waiting for traditional futures markets to reopen. The proposal also reflects a broader push to integrate stablecoins and on-chain infrastructure into U.S. derivatives markets, potentially increasing competition with traditional exchanges like CME Group.

The CFTC is currently navigating jurisdictional overlaps between digital asset and commodity regulation. A unified framework that treats energy perpetuals similarly to crypto perpetuals — focusing on economic structure rather than the underlying asset — could simplify rules and foster innovation in derivatives trading, the groups argue. The agency has not yet set a timeline for its review of energy perpetual contracts.

This article is for informational purposes only and does not constitute investment advice.