ICE and CME urge US regulators to curb Hyperliquid energy trading

Regulators are being drawn into a dispute between traditional energy markets and Hyperliquid, the DeFi exchange behind the HIP-3 platform. Intercontinental Exchange (ICE) and the Chicago Mercantile Exchange (CME) have urged U.S. authorities to rein in Hyperliquid’s expansion into commodity markets. Bloomberg, citing unnamed sources familiar with regulatory discussions, reported that executives from ICE and CME view Hyperliquid’s energy-linked on-chain derivatives as exposing energy markets to insider trading, price manipulation, and other risks.

The concerns highlighted by ICE and CME center on the platform’s anonymous and unregulated structure, which Bloomberg describes as a potential vector for sanctions evasion in critical markets such as oil and gas. The report underscores a broader tension: as traditional markets increasingly flirt with on-chain infrastructure, regulators are weighing how to preserve market integrity while not stifling innovation.

Key takeaways

• ICE and CME are pressing regulators to curb Hyperliquid’s foray into energy-linked on-chain derivatives, citing insider trading and price manipulation risks.
• Hyperliquid’s HIP-3, launched in January 2025, enables builder-deployed perpetual futures for any electronically traded asset class by staking 500,000 HYPE tokens.
• Open interest in HIP-3 markets surpassed $2.5 billion by May, signaling growing participation in on-chain commodity instruments.
• The HYPE token has seen notable momentum, rising from roughly $20 to around $44 at the time of publication, with notable short-term upside touted by market observers.

HIP-3 and the floodgates of on-chain commodities

Hyperliquid introduced HIP-3—referred to as “Builder-Deployed Perpetuals”—in January 2025. The model lets any user who stakes 500,000 HYPE, the platform’s native token, construct perpetual futures markets for virtually any electronically traded asset class. In practice, this framework accelerates the migration of traditional market mechanics onto the blockchain, extending the reach of on-chain derivatives into energy-linked products that previously existed only in centralized venues.

The move aligns with a broader industry trend: significant portions of traditional finance are exploring or migrating to on-chain infrastructure, challenging the clear boundary between centralized exchanges and decentralized platforms. HIP-3 markets have drawn substantial attention from traders and liquidity providers, as evidenced by rising open interest and sustained activity, with DeFi data aggregators noting growth through May. The upshot for the market is twofold: expanded access to on-chain derivatives for energy-related assets, and heightened scrutiny from regulators wary of opacity and cross-border implications.

Market response and investor sentiment

Investor reaction to HIP-3 has been pronounced. After HIP-3’s launch, the HYPE token posted significant appreciation. The token surged by more than 58% within three days of the market’s expansion, moving from a roughly $20 threshold to around $38, and was trading near $44 when this report was prepared. Market observers have pointed to the token’s structure, including a 97% allocation of trading fee revenue back into HYPE buybacks, as a driver of demand and price strength over time.

In March, well-known market commentator and investor Arthur Hayes forecast that HYPE could reach as high as $150 per token by August, driven by sustained demand for commodities-linked, on-chain derivatives and the potential to siphon volumes from centralized exchanges. While such forecasts reflect a particular bears-and-bulls perspective, they underscore the degree to which HIP-3 and the broader Hyperliquid ecosystem have captured attention from traders seeking exposure to energy-market dynamics via decentralized channels.

Open interest for HIP-3 markets has continued to climb since inception, with figures showing more than $2.5 billion at the height of May activity, according to DeFiLlama data. This level of liquidity suggests growing confidence among participants in the viability of builder-deployed perpetuals as a mechanism to access energy and other commodity exposures on-chain, even as regulators deliberate how such platforms should be overseen within the broader financial system.

What this means for the crypto and energy markets

The clash between Hyperliquid’s expansion and the concerns voiced by ICE and CME highlights a decisive moment for the intersection of crypto, DeFi, and traditional energy markets. On one hand, HIP-3 represents a deliberate attempt to democratize the creation of perpetual futures, enabling market participants—from retail traders to sophisticated institutions—to design and access new liquidity pools for asset classes previously confined to fiat-native markets. On the other hand, the reliance on a decentralized, semi-anonymous framework raises legitimate questions about market integrity, price discovery, and sanction risk in essential sectors such as oil and gas.

Regulators, for their part, appear poised to weigh potential safeguards or restrictions as Hyperliquid continues to grow. The Bloomberg report suggests that conversations are ongoing, with no immediate regulatory consensus in sight. For investors and builders, the key questions are how HIP-3 markets will be regulated going forward, what risk controls, disclosure standards, or licensing requirements might emerge, and how these dynamics could affect liquidity, funding rates, and on-chain hedging capabilities in energy markets.

Meanwhile, the broader market will be watching how Hyperliquid balances growth with compliance, and whether other traditional financial players will follow the same path toward on-chain commodity exposure. The next developments—regulatory guidance, potential policy shifts, and updates from Hyperliquid about risk controls—will likely shape the pace and shape of continued innovation in on-chain derivatives.

As Hyperliquid’s HIP-3 experiment unfolds, readers should monitor regulatory updates and platform-rules disclosures, as well as metrics on open interest, trading volumes, and the health of the buyback program. The outcome will influence not only the viability of builder-deployed perpetuals but also the broader narrative around the integration of real-world assets with decentralized finance.