‘no Dark Arts To This’: How An Obscure Crypto Platform Hit Trump’s Radar

President Donald Trump and one of his top market regulators are throwing their weight behind a little-known cryptocurrency exchange that allows traders to make risky bets on everything from SpaceX to the price of oil.

It may supercharge the war between legacy Wall Street players and the politically influential upstarts vying to take them on.

All this burst into the open at the White House last week when Trump surprised markets by touting his administration’s work to bring the offshore crypto platform, Hyperliquid, into the U.S.

The Hyperliquid name-check came at the request of the Commodity Futures Trading Commission, a small but powerful market regulator, said a person familiar with the matter, who was granted anonymity to speak freely. The agency’s staff wanted to show its commitment to bring crypto companies onshore, the person said. For Hyperliquid’s backers, the presidential shout-out could juice their bid to open the platform up to the American public.

“There’s really no dark arts to this,” said Jake Chervinsky, who leads the Hyperliquid Policy Center, an advocacy group that was set up by a Hyperliquid-linked foundation earlier this year. Chervinsky said he was surprised by the president’s shoutout and called it a sign of “the importance and the priority of the work that we’re doing and the mission to bring Hyperliquid onshore in a legal and compliant fashion.”

The episode highlights the muscle that crypto now wields in Trump’s Washington. Hyperliquid’s backers have enlisted the help of heavyweights like the K Street lobbying shop BGR Group and the Trump-tied law firm Sullivan & Cromwell to bring the platform into the U.S.

How the CFTC will bring Hyperliquid into the regulatory fold is still an open question. The Michael Selig-led agency says it will move carefully — and Trump said last week that Selig is working to onshore Hyperliquid “in a fully compliant and legal fashion.”

Yet the push could become a new front in the clash over the future of Wall Street. Financial industry stalwarts have spent much of the last year and a half butting heads with crypto upstarts, many of whom enjoy the Trump administration’s blessing. Legacy financial exchanges will be watching whether — and how — regulators force Hyperliquid to comply with longstanding market rules.

“The incumbents are accustomed to fierce competition, they’re not afraid of that,” former CFTC Commissioner Dawn Stump told POLITICO. But, she added, “it’s only fair that the new entrants and the incumbents have a level playing field when it comes to the core regulatory tenets in the United States.”

Hyperliquid allows users to make 24/7 bets on the price of assets tied to stocks, gold and oil, a feature that helped launch the three-year-old platform into the spotlight earlier this year as one of the only oil-trading hubs that was open over the weekend when the Iran war kicked off.

It does so by allowing traders to borrow money to amplify their bets thanks to a controversial product known as perpetual futures, or perps. Hyperliquid users can turbocharge their wagers by as much as 40 times on certain assets. But such so-called leverage cuts both ways — and when a bet goes awry, it can exacerbate a trader’s losses.

“It’s just a supercharged way of gambling,” said Benjamin Schiffrin, director of securities policy at the financial industry watchdog group Better Markets. “Everybody agrees with the idea that our markets are the envy of the world, but the reason is because we have protections to ensure that people aren’t exposed to unnecessarily risky products.”

CME Group CEO Terry Duffy has warned that perps products more broadly could bring about a “2007 for retail.”

Perps are not exclusive to Hyperliquid. The products are widely available within the crypto markets — and are massively popular with everyday traders.

Yet their recent introduction into the U.S. has drawn fierce resistance from the Chicago-based exchange giant CME, which in June sued over the CFTC’s approval of the products, as well as consumer watchdogs and even some agricultural groups. Critics also worry about the potential price dislocations that could happen on weekends and the fact that Hyperliquid, despite any regulatory guardrails around the platform, is already influencing oil prices around the world.

Singapore-based Hyperliquid Labs, the main developer behind the platform, didn’t respond to a request for comment. 

“If the United States fails to keep pace with rapid advances in trading and markets, we risk ceding our reputation as the global hub of financial innovation,” CFTC spokesperson Beau Brooks said in a statement. “Under Chairman Selig’s leadership, the CFTC is committed to promoting fair access and responsible innovation so that the next generation of our financial markets are built here in America and not overseas.”

Leverage is a “feature, not a bug, of the derivatives markets” that is used by traders of all stripes, Hyperliquid Policy Center’s Chervinsky said. But the CFTC is not going to allow the steep leverage ratios that are currently available offshore, he added, calling it “unfounded” to think that regulators would sign off on “extremely high amounts of leverage just because some markets offshore are offering that.”

Still, for Hyperliquid’s backers, the platform is much more than just a hub of speculative trading. They view it as a technological feat able to solve some of the speed and cost issues that have bogged down past efforts within crypto to take on traditional finance. And the platform, they say, has a clear place in the industry — and in the U.S.

“Markets like choices, and having more interesting ways to trade is a good thing,” said David Schamis, CEO of Hyperliquid Strategies, a publicly traded company devoted to holding Hyperliquid’s own crypto token, HYPE. “They built a very good platform that’s extremely resilient, that can handle tremendous volumes, that’s easy to use. It’s just a better mousetrap for trading” perps.

The Hyperliquid Policy Center has tapped BGR Group’s Andy Lewin, Matt Hoffmann and Keaghan Ames for help as it lays the groundwork for Hyperliquid on the policy side, according to lobbying records. And Colin Lloyd, a partner at Sullivan & Cromwell, is involved in the talks with the CFTC about how to bring the platform Hyperliquid onshore, according to a person familiar with the matter. BGR and Lloyd declined to comment.

Despite its rise, Hyperliquid still deals in a relatively niche product whose long-term place in U.S. finance is undetermined. Some Wall Street executives, including Intercontinental Exchange Founder and CEO Jeffrey Sprecher, who is married to Small Business Administrator Kelly Loeffler, have even expressed admiration for Hyperliquid’s developers, despite investor fears over what perps and perp-centric platforms like Hyperliquid could mean for their business models.

But Sprecher, whose company owns the New York Stock Exchange, still isn’t ready to pile into perps. He said in a recent Bloomberg TV interview that his clients are focused on hedging — or using the markets to offset the financial risks of everything from further turmoil in the Middle East to a bad corn harvest.

Perps, he added, aren’t built for those traders.

“I don’t view it as a particular threat to the traditional exchange space” at the moment, another exchange executive said of Hyperliquid. “It’s not a plug and play for an existing customer.”

Chervinsky acknowledges that perps aren’t going to be a perfect fit for everyone. But in his eyes, neither they nor Hyperliquid are going anywhere — and Wall Street might be best to get on board sooner rather than later, he said. Trump is, after all.

“This is an opportunity, not a risk,” Chervinsky said. “The market participants who will succeed in the next generation of financial innovation are those that embrace this type of technology — rather than shut their eyes and hope that it goes away.”