The Hyperliquid Policy Center has urged the European Commission to regulate crypto perpetual futures under MiFID II, not MiCA, in its first EU filing.
Hyperliquid News
The Hyperliquid Policy Center (HPC) has submitted a formal response to the European Commission's review of the Markets in Crypto-Assets Regulation, known as MiCA. The filing marks the organization's first policy submission outside the United States.
HPC argued that perpetual futures, a type of derivative contract with no expiry date, should be classified under MiFID II, the European Union's existing framework for securities and derivatives markets, rather than under MiCA.
Classification Should Follow Economic Function
The group's submission centers on three main arguments. HPC said instrument classification should follow the economic features of a product rather than the technology used to record it, and that regulation should be calibrated to the actual functions and risks a product presents.
HPC also argued that public blockchains can help meet existing supervisory objectives, since every trade, funding payment, and liquidation on an on-chain order book is recorded on a public ledger that regulators can inspect directly.
The European Commission opened its targeted consultation on the MiCA review in May. The consultation covers a range of topics, including how much access European Union investors should have to global sources of liquidity.
HPC's submission asked the Commission to confirm through existing guidance from the European Securities and Markets Authority that perpetual futures fall under MiFID II regardless of how they are recorded or what they reference. The group said this would require no new legislation.
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The submission separately addressed how MiFID II should be applied to perpetual futures once classified. HPC said the EU's 2018 restrictions on contracts for difference should not be applied to perpetual futures without modification, arguing the two products carry different structures and risks.
HPC noted that the US Commodity Futures Trading Commission permitted the first perpetual futures to list on a US exchange in May, and that Hong Kong's Securities and Futures Commission published its own framework for the products in February. The group said regulators in both jurisdictions addressed similar underlying mechanics to those raised in its EU filing.
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