Hyperliquid launched a policy center in Washington on Feb. 18, stocked with 1 million HYPE tokens worth about $28 million, led by Jake Chervinsky, the crypto lawyer who spent years building the Capitol Hill playbook for the industry.
The Hyperliquid Policy Center operates as a 501(c)(4) focused on decentralized finance and perpetual derivatives. This isn’t just a crypto company that hires lobbyists. It is a protocol that funds a sustainable DC presence with its own token, making the policy infrastructure part of the product itself.
This move signals something broader: the era of DeFi’s “code paths around regulations” is coming to an end. The policy is now part of the moat. And the battleground is derivatives, because perpetual futures are the biggest real on-chain use case that US regulators still can’t handle.
Why derivatives are the trend
Hyperliquid processed $256 billion in perpetual futures volume over the past 30 days, with open interest of more than $5 billion.
When a platform becomes a meaningful market infrastructure for leveraged trading, it attracts scrutiny. Britain maintains its ban on retail crypto derivatives even as it relaxes other access.
The CFTC has taken enforcement action against bZeroX and Ooki DAO for offering illegal off-exchange trading of digital assets. Perpetrators dominate the crypto derivatives markets, which account for approximately 75% of total activity, largely because onshore rules remain ambiguous.
Perpetuals do not expire and use revolving financing rates instead of settlement mechanisms. That simplicity creates regulatory friction: perpetrators do not fit neatly into existing commodity futures statutes.
Chervinsky told Fortune that offenders offer “more direct exposure to the underlying asset” than traditional derivatives, but the same design makes them harder to regulate.
The Hyperliquid Policy Center exists to make perpetrators legible to lawmakers before lawmakers make them illegal by default.
The DC window for DeFi is open
Treasury Secretary Scott Bessent told Congress to pass a major crypto market structure bill by spring 2026, warning that the coalition could fall apart if it is delayed.
The SEC and CFTC held a joint harmonization event on January 27. These are not abstract conversations, they are design sessions for the map.
The CLARITY Act was passed by the House of Representatives in July 2025 and sits in the Senate Banking Committee. It establishes a federal market structure for digital commodities, including exchange and broker registration frameworks, and defines terms such as “mature blockchains.”
However, the Congressional Research Service analysis explicitly states that CLARITY’s framework excludes derivatives. Even if market structure legislation is passed, leveraged perpetuals remain unresolved.
Meanwhile, the regulation of stablecoins becomes law. In July 2025, the GENIUS Act was passed, establishing a federal framework for a stablecoin. Standard Chartered predicts that the stablecoin supply will grow to $2 trillion by 2028.
The contrast is stark: the payment rails are becoming increasingly clear, while the trade rails remain ambiguous. This split defines crypto’s next DC battle.
The K-street numbers
According to data from OpenSecrets, lobbying spending in the digital assets sector rose 66% to $40.6 million in 2025. Major banks spent $86.8 million.
Crypto teaches DC the TradFi way: sustainable institutional presence, technical research, cultivating relationships. Hyperliquid’s $28 million seed round exceeds what most crypto advocacy groups spend in a year. The Digital Chamber spent $5.6 million in 2024, and the Blockchain Association spent $8.3 million.
The Hyperliquid Policy Center is not alone.
The DeFi Education Fund has been active since 2021. Ethereum ecosystem protocols formed the Ethereum Protocol Advocacy Alliance in November 2025. The Solana Policy Institute exists.
These are not ad hoc legal defense funds. They are institutionalized policy layers that operate as 501(c)(4) nonprofits with full-time staff and Hill briefing schedules.
What a policy moat means
DeFi venues now compete on three dimensions: market design (user experience, liquidity, fees), compliance design (what can be enforced, who controls the interfaces), and narrative design (how “decentralized” is defined in law).
CLARITY creates registration concepts for digital commodity exchanges and brokers, but explicitly excludes derivatives, leaving perpetrators in the dark about regulations.
The practical implication: Even if Hyperliquid’s protocol remains accessible globally, US-facing front ends will come under pressure to adopt registry-like standards such as surveillance, disclosure, segregation, and KYC gates.
The question is whether the US will use routes through compliant intermediaries for enforcement or focus on checkpoints, such as operators and board participants.
The CFTC’s enforcement history suggests that regulators will pursue the latter if the former does not materialize.
Three paths ahead
The next six to 18 months will determine how the US handles decentralized derivatives rules.
The first scenario consists of the creation of regulated access paths. Legislation will be adopted in spring 2026, with follow-up guidance on derivatives. US-facing front ends are adopting registration-like standards, while basic protocols remain accessible globally.
Volume is consolidating in locations that can afford compliance, creating policy moats.
The second scenario is that the crackdown at the front of the chokepoints increases. Enforcement focuses on control points, such as operators and administrative actors. Geofencing is spreading, US-facing interfaces are getting worse, and retail users are being pushed abroad. Trade continues, but fragments between jurisdictions.
The third scenario becomes concrete when the failure of legislation leaves the perpetrators offshore.
The Bessent coalition warned of ruptures. CLARITY blocks or passes without derivative provisions. The US is getting clarity on spot and stable coins, but is leaving perpetrators in a gray zone. Offshore dominance continues.
All three scenarios involve policy work. The difference is timing and leverage. Early involvement in rulemaking outweighs reactive defense when enforcement actions land.
| Scenario | Trigger/policy catalyst | Regulatory attitude | What happens to US access? | Market outcome |
|---|---|---|---|---|
| Regulated access paths are created | The momentum of the market structure in spring 2026 continues; SEC/CFTC harmonization continues; further work will clarify how onchain perpetrators can fit into a compliant framework | “Yes, but” regime: permitted rails + registration-like expectations for interfaces | Adopt US-facing front ends KYC gates, disclosures, surveillance, segregationand stricter controls; basic protocols remain accessible worldwide, but US UX becomes ‘regulated mode’ | Volume consolidates in a few locations that can afford compliance; policy ditches form; perpetrators become institutionally more legible (but less without consent) |
| Front-end chokepoint occurrence | Enforcement prioritizes control points (operators, key contributors, UI hosts, governance actors) after limited legislative progress | ‘Enforcement first’ attitude: focus on intermediaries and ‘effective control’ rather than a protocol ideology | More geofencingfront-end shutdown risk and reduced access; US users turned to offshore routes/APIs and fragmented liquidity | The trade continues, but routes around the USA; liquidity fragments; compliance becomes a competitive weapon; higher regulatory risk premium for token-linked locations |
| Legislative collapse → offshore dominance | Coalition Fractures; CLARITY stalls or advances without derivatives; stablecoins receive clarity, while perpetrators are not tackled | “No clear path” regime: derivatives remain in limbo; Policy uncertainty remains | US access remains gray/limited; Compliant offenders on land do not occur on a large scale; offshore remains the standard | Offshore locations maintain dominance; onchain perpetrators are growing globally, but American participation is structurally limited; DC becomes a recurring risk in the headlines rather than a dissolved moat |
The shift that no one wanted to admit
For years, crypto has positioned decentralization as regulatory arbitrage: build systems that can’t be shut down and bypass old rules.
That story clashes with reality. When your protocol handles billions in daily volumes, generates revenue that flows to token holders, and provides leverage to retail users in a 24/7 global marketplace, there’s no need to duck regulation.
Instead, you’re building a parallel infrastructure that regulators will eventually force into their framework or exclude from their jurisdiction.
Hyperliquid’s move to Washington openly acknowledges this.
DeFi is entering its K Street era not because the protocols have lost their ideological footing, but because waiting for precedent-based enforcement is riskier and less likely to produce workable rules.
While DC debates, Hong Kong plans to issue its first stablecoin licenses in March 2026.
The EU’s MiCA provides a live token framework. Britain is easing access to some crypto products while maintaining strict perimeter controls on derivatives. Chervinsky’s warning that “other countries will seize the opportunity” is not hypothetical.
The next challenge will not just be technical superiority or liquidity depth. It will be a compliance architecture that works, narrative frameworks that resonate with regulators, and relationships that allow you to shape the regulations before the regulations shape you.
The market will test whether this works. If the Hyperliquid Policy Center helps secure a regulatory pathway for perpetrators in the US, other protocols will follow suit.
If not, the $28 million becomes a case study in expensive signaling. Anyway, the experiment is live. DeFi went to Washington. Now the market is finding out if Washington was waiting.