Circle · The Block
The group argues MiFID II's Annex I derivative categories already capture perps, so no new law is needed
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HPC also doesn't want perps lumped in with contracts for difference, or CFDs, which ESMA restricted for retail traders in 2018.
Key facts
- The Washington-based HPC was set up in February and funded with 1 million HYPE tokens, then worth about $29 million, from the Hyperliquid Foundation
- The Hyperliquid Policy Center (HPC) wants the European Commission to treat crypto perpetual futures as derivatives under MiFID II, the EU's existing rulebook for financial instruments first passed
- At one point in late July, HIP-3 markets accounted for 75% of Hyperliquid's overall trading volume, per The Block's data, though that number has since fallen to roughly a quarter of the overall
- Of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated (USDC, USDG, EURC)," Circle wrote describing its submission
Summary
The Hyperliquid Policy Center (HPC) wants the European Commission to treat crypto perpetual futures as derivatives under MiFID II, the EU's existing rulebook for financial instruments first passed in 2014, rather than bring them under the Markets in Crypto-Assets Regulation, or MiCA. HPC urged the Commission as such in its response to the Commission's MiCA review, which opened on May 20. "The Consultation arrives at a defining moment for financial markets, as public blockchains now serve as infrastructure for markets that trade continuously and in substantial volume, and regulators in several jurisdictions are working through how regulated products can use them," HPC wrote in its response. USDC issuer Circle used its submission to the same MiCA review to go after the regulation's stablecoin reserve rules. "Of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated (USDC, USDG, EURC)," Circle wrote describing its submission.