Hyperliquid Policy Center and trade[XYZ] ask SEC for a pre-IPO perpetuals framework
The joint letter says cash-settled IPOP contracts could create public price signals before listings, but calls for rules on classification, disclosure, leverage and market integrity.
By The Third AnglePublished 3 min read
An illustrative regulatory-paper image; it does not depict the SEC filing or the signatories. Photo: Unsplash · Unsplash License
The Hyperliquid Policy Center and trade[XYZ] have asked the Securities and Exchange Commission to create a regulatory path for pre-IPO perpetuals, a derivative product they say can provide public price discovery before a company lists. The groups published a joint comment letter on Aug. 18 in response to the SEC's request for ideas to modernize the IPO process.
The proposal comes from two parties with a direct interest in the product: the policy center advocates for U.S. access to onchain markets, while trade[XYZ] deploys perpetual markets on Hyperliquid. Their letter says the product is not equity ownership and does not give holders shares, voting rights, dividends or IPO allocations.
A derivative, not a share
An IPOP, or pre-IPO perpetual, is described in the letter as a cash-settled contract referencing the anticipated share price of a private company approaching a listing. The contract is designed to run for a limited period before converting into a standard perpetual after a listing or settling under predefined alternative rules if the listing is delayed.
That structure is materially different from a private-share transaction. It gives traders synthetic price exposure, not ownership, and the letter says trade[XYZ] applies geoblocking and wallet screening to keep its markets unavailable to U.S. persons today.
What the groups want clarified
The letter asks the SEC and Commodity Futures Trading Commission to clarify whether equity-linked perpetuals should be treated as security futures or security-based swaps. That classification would affect registration, venue, clearing and margin requirements.
The other requests cover disclosures tailored to contract mechanics, listing eligibility guardrails, oracle and settlement rules, safeguards against manipulation and conflicts, and a phased framework that could eventually include retail investors. The proposal is an industry submission, not an SEC approval or a finding that the products are currently lawful for U.S. users.
