HPC and Phantom urge CFTC to distinguish developers from financial firms in on-chain rules

The Hyperliquid Policy Center (HPC) and Phantom have submitted a joint letter to the U.S. Commodity Futures Trading Commission (CFTC), arguing that on-chain regulation must clearly distinguish between infrastructure developers and financial service providers. They contended that U.S. financial regulation has long treated these as separate domains, citing the example of internet service providers who are not regulated as financial firms despite providing essential infrastructure. The letter stated that regulations should target the financial companies operating services, not the developers creating the technology. HPC and Phantom emphasized that the regulatory framework needs to be re-examined to foster innovation, drawing a parallel to how a software engineer who builds a matching engine is not involved in the operations of a futures exchange.