Hyperliquid founder Jeff Yan told Bloomberg that the U.S. should regulate the companies operating on his platform, not the protocol itself.
Why the distinction matters
The decentralized finance sector has long argued that blockchain networks are neutral layers, immune to jurisdictional control. Yan’s stance flips that narrative, insisting that the risk resides with on‑ramps, custodians and trading venues that interface with users.
The regulatory angle
U.S. regulators have been circling DeFi infrastructure for years, warning that unlicensed exchanges could violate securities laws. By targeting the businesses rather than the code, Yan hopes to avoid stifling innovation while still giving authorities a clear enforcement hook.
Market reaction
Traders have taken note, with Hyperliquid’s token price edging up 3% after the interview. The proposal could also set a template for other layer‑2 projects that want to stay under the radar of the SEC.
What’s next?
If Washington adopts this model, compliance teams will need to rebuild KYC/AML pipelines for every on‑chain service. For builders, the message is clear: build responsibly, but keep the protocol open.
