The Hyperliquid Policy Center (HPC) praised SEC Chair Paul Atkins on Friday for what it called a bold effort to bring more clarity to on-chain markets.
SEC’s On-Chain Guidance Agenda
Atkins focused on four key areas where he believes the SEC should offer clearer guidance on how regulatory rules apply to on-chain activity. He said participants need a clear understanding of how on-chain trading systems can operate within the existing regulatory framework.
Looking ahead, he noted that while the SEC might consider a limited “innovation pathway” soon, the agency should also think about creating a framework that can stand the test of time. In his view, this would involve a formal rulemaking process that specifically addresses how the SEC’s definition of an “exchange” applies to on-chain trading systems.
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The SEC chair also highlighted the need to clarify how broker and dealer rules would apply to these activities. He said the Commission should examine issues raised in a recent staff statement on software interfaces, and suggested this policy effort could involve a formal exemptive rulemaking process.
A third focus was the definition of a “clearing agency” as it relates to on-chain clearing and settlement. Atkins said rulemaking may be needed to confirm which general-purpose activities fall outside that definition.
Finally, Atkins called for more clarity around what are commonly called “crypto vaults.” He described these as on-chain software applications that let users earn passive yield by putting their assets into yield-generating opportunities on-chain. He said the Commission should address the relevant parts of the Securities Act and Advisers Act as it considers these policy initiatives.
Why the Hyperliquid Policy Center Finds This Promising
Atkins concluded by saying the SEC will keep moving forward to support markets moving on-chain. At the same time, he repeated his call for Congress to send the CLARITY Act to President Trump’s desk. He argued that while the SEC plans to “future-proof” its efforts through formal rulemaking, there is “no more powerful” way to future-proof than by putting well-designed statutory language into law.
The Hyperliquid Policy Center, led by Jake Chervinsky, said it was encouraged by Atkins’ approach of mapping on-chain clearing and settlement systems to existing legal frameworks “on their own terms,” rather than forcing them into outdated categories built for older systems.
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The Hyperliquid Policy Center also called on-chain clearing and settlement “one of the most significant financial infrastructure innovations of our generation,” and said it sees the chairman’s stance as a constructive step toward regulatory alignment as on-chain systems continue to evolve.
At the time of writing, Hyperliquid’s native token, HYPE, was trading at $42.98, up 2% over the last 24 hours. Currently, the token is trading nearly 27% below its all-time high of $59, which was reached last year.
Featured image created with OpenArt, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs about the Hyperliquid Policy Centers praise for SEC Chair Atkins and his onchain agenda covering both beginner and advanced angles
BeginnerLevel Questions
Q What is the Hyperliquid Policy Center
A Its a group that focuses on blockchain policy and advocacy They recently praised the new SEC Chair for supporting onchain activities
Q Who is SEC Chair Atkins
A He is the current head of the US Securities and Exchange Commission the agency that regulates financial markets He is known for being more open to crypto and blockchain technology than previous chairs
Q What does onchain agenda mean
A It means pushing for rules and policies that help real blockchain activity happen on public networks rather than trying to force everything into oldfashioned offchain financial systems
Q Why did the Hyperliquid Policy Center praise Chair Atkins
A Because they believe his proposals will make it easier for decentralized projects to operate legally in the US without being unfairly targeted
Q What are the four key proposals mentioned
A The specific proposals havent been published in full but they generally focus on
1 Clearer rules for crypto tokens
2 Allowing onchain trading without registering as a traditional stock exchange
3 Protecting decentralized finance from being treated like banks
4 Encouraging innovation through safe harbor periods for new projects
AdvancedLevel Questions
Q How do Atkins proposals differ from the previous SECs approach
A The previous SEC used enforcement actions to crack down on most crypto projects arguing nearly every token was a security Atkins agenda is more permissivehe wants to define what isnt a security allowing onchain protocols to operate freely
Q What practical benefits could this have for Hyperliquid specifically
A Hyperliquid is a decentralized exchange with its own Layer 1 blockchain Under Atkins proposals Hyperliquid could
List tokens without fear of being sued
Offer trading of utility tokens that arent classified as securities
Operate its onchain order book without registering as a brokerdealer