One of the most prominent executives in decentralized finance has waded directly into Washington’s slow-motion fight over crypto rules. Jeff Yan, co-founder of the Hyperliquid trading platform, laid out a regulatory blueprint this week whose core message is blunt: regulate the companies that deploy markets and services on a blockchain, and leave the blockchain itself alone.
The proposal, detailed in interviews with CoinDesk and Bloomberg and amplified in fresh weekend coverage from Yahoo Finance, arrives at a moment when the United States is still struggling to finish the job it started with landmark stablecoin legislation. For everyday investors, the question of who gets regulated — the technology or the businesses built on top of it — may sound academic. In practice, it could decide which trading venues survive the next regulatory cycle and how much competition retail traders actually get to enjoy.
Target the deployers, not the network
Yan’s argument, as reported by CoinDesk on October 15 and echoed across multiple outlets since, is that a blockchain is closer to a public utility than a company. The ledger does not solicit customers, hold custody balances or make business decisions. The firms that deploy trading venues, lending markets and other services on top of that ledger do all of those things — and that, in Yan’s telling, is where the regulatory perimeter should sit.
Altcoin Buzz summarized the stance as “regulate market deployers, not the chain,” while BigGo Finance framed it as a call for the United States to police market operators rather than blockchain networks. The distinction matters because the alternative approach — treating networks, tokens or even smart-contract code as the regulated entity — tends to produce rules that are either unenforceable against offshore deployments or so broad they sweep up developers who never touch customer funds.
Yan did not stop at architecture. According to TokenPost, he also argued that much of a company’s value is now created before it ever reaches the public markets, a shift he says financial regulation has failed to absorb. Onchain venues let that pre-IPO value trade around the clock, and the regulatory system is still built around the assumption that retail investors only meet a company on listing day.
A pitch wrapped around Hyperliquid’s ambitions
It would be naive to pretend the proposal is disinterested. Bloomberg’s coverage, headlined around Yan’s plan to bring the entire financial industry onto Hyperliquid, makes clear that the founder sees a permissive-but-clear US rulebook as the precondition for Wall Street firms to move serious business onchain. A framework that pins obligations on identifiable operators — rather than on the neutral infrastructure those operators share — is exactly the kind of legal footing an institution’s compliance department needs before it will route flow through a decentralized venue.
Hyperliquid has become one of the most closely watched projects in crypto precisely because it straddles this line. Its perp trading venue is fully onchain, yet the ecosystem around it increasingly resembles a conventional financial exchange, complete with the sort of leveraged products that attract regulator attention. Pump.fun’s decision to launch perpetuals trading on Hyperliquid, covered here earlier today, shows how quickly consumer-facing crypto is converging on this infrastructure.
That convergence is what gives Yan’s blueprint political traction — and political risk. The more Wall Street-adjacent activity flows through onchain venues, the louder the calls will get for someone to be accountable when things go wrong. Yan’s answer is to make accountability follow the deployer: the entity that lists the market, sets the parameters and earns the fees.
Where this fits in Washington’s stalled calendar
The timing is not accidental. The Clarity Act, the market-structure bill that would formally split digital-asset oversight between the SEC and CFTC, remains stuck in the Senate after a revised 635-page draft failed to break the deadlock, as this newsroom reported earlier this week. In the vacuum, the CFTC has floated its own framework for leveraged retail crypto trading on regulated exchanges, while SEC Chair Paul Atkins spent the weekend reiterating that durable crypto rules ultimately have to come from Congress, with a key comment deadline landing Tuesday.
Yan’s framework reads as an attempt to influence that drafting process before it hardens. Deployer-based regulation has an appealing simplicity for lawmakers: it maps onto concepts they already understand, such as broker-dealers and designated contract markets, instead of asking them to regulate software. Skeptics will note that the definition of a “deployer” can get fuzzy fast in ecosystems where governance is distributed and code can be forked overnight.
There is also an international dimension. Europe’s MiCA regime already regulates the issuers and service providers rather than the rails, and the UK’s post-FCA regime is converging on a similar posture. If the United States adopts deployer-based rules, global compliance strategies align; if it instead pursues network-level restrictions, firms face a bifurcated world where the same smart contract is legal in one jurisdiction and contraband in another.
What it means for your portfolio
For retail investors, the practical takeaways are straightforward. First, operator-focused regulation would put the entities you actually interact with — the front-ends, the market makers, the venues — under identifiable supervision, which in theory improves recourse when something breaks. Second, it lowers the barrier for traditional financial institutions to enter onchain markets, a flow of capital and liquidity that has historically preceded major cycle expansions. Third, it would intensify competition among trading venues, which tends to compress fees — the quiet tax every active trader pays.
None of this is law, and nothing in Washington moves quickly. But when the founder of one of the most-used trading venues in crypto publicly hands regulators a rulebook that says “supervise my customers’ deployers, not my chain,” it is worth reading as both a policy proposal and a business strategy. The Senate will eventually have to choose an approach. The blueprint now on the table at least has the virtue of being specific.
of course the hyperliquid guy wants the chain left alone and only the deployers regulated. his whole business model depends on that framing, very convenient pitch to bring to washington
self interested for sure but hes not wrong. a 635 page clarity act draft couldnt even split sec and cftc duties, going after code instead of operators would be even less enforceable offshore
the 635 page draft point is the real one. if they cannot even split sec and cftc jurisdiction, regulating code deployed from a laptop in singapore is pure fantasy
But that cuts both ways. Fincen and the CFTC already reach offshore operators when there is a named entity to serve papers on. Code has no mailbox, deployers do.
convenient yes, but mica already regulates issuers and service providers instead of the rails and nobody calls that a hyperliquid pitch. the framing was always where this ends up, yan just said it to bloomberg instead of a conference
The part about pre-IPO value trading around the clock onchain is what regulators are least prepared for. The entire system still assumes retail first meets a company on listing day.
the pre ipo point is underrated. companies spend a decade private now, by listing day the gains are already gone. onchain venues just make that visible to everyone
obviously self serving, but accountability follows the deployer is the same logic as regulating brokers instead of tcp/ip. pump.fun perps launching on hyperliquid mid-debate only helps his timing
the compliance desk angle is the whole ballgame imo. no institutions counsel signs off on a venue where nobody identifiable is answerable. yan basically handed wall street legal cover in writing and called it policy