Hyperliquid Policy Center, Phantom urge CFTC to stop treating onchain protocols like traditional brokers and exchanges

What happened

Hyperliquid Policy Center and Phantom asked the CFTC to stop treating on‑chain protocols as if they were traditional brokers and exchanges after the CFTC and SEC released a Request for Information on financial innovation in mid‑June.

Confirmed

Global impact / market context

If regulators treat decentralized protocols like regular brokers, they could impose stricter licensing, reporting and capital rules that would raise costs for developers and users, potentially slowing growth in the DeFi sector.

Analyst inference

The request for information shows U.S. regulators are actively examining how to apply existing rules to crypto, creating uncertainty for projects that operate without a central intermediary and influencing investor sentiment toward DeFi assets.

Analyst inference

What to watch

1. Whether the CFTC issues formal guidance that reclassifies on‑chain protocols, which would directly affect compliance costs for DeFi platforms. Proposed
2. Any follow‑up comments from the SEC that could align or diverge from the CFTC’s stance, shaping the overall regulatory framework for crypto. Proposed
3. The response from other DeFi projects to the policy request, indicating how the broader ecosystem might adapt its business models or seek exemptions. Proposed

Affected assets

• DEFI — DeFi
• HYPE — Hyperliquid

Evidence

• theblock.co