Hyperliquid Groups Urge SEC to Open Pre-IPO Perpetuals to US Investors

Points of Focus

• Hyperliquid Policy Center and TradeXYZ asked the SEC to permit pre-IPO perpetuals.
• IPOPs provide price exposure to private companies without shares or ownership claims.
• The SEC and CFTC must determine the nature of the contracts.

The Hyperliquid Policy Center and TradeXYZ have urged the US Securities and Exchange Commission to create a regulatory pathway allowing American investors to trade pre-initial public offering (IPO) perpetual contracts.

The organizations submitted a joint comment letter in response to the SEC’s request for proposals to modernize the IPO process. Their proposal centers on pre-IPO perpetuals, or IPOPs, which provide price exposure to companies approaching public listings without transferring ownership of their shares.

TradeXYZ, described as the largest deployer of perpetual markets under Hyperliquid Improvement Proposal 3, launched its first IPOP in May 2026.

Pre-IPO contracts offer price exposure, not shares

An IPOP is a cash-settled derivative tracking the anticipated share price of a private company shortly before its listing. Holders receive no shares, voting rights, IPO allocations, or claims against the company.

The contracts are available only during a limited pre-listing window and terminate or convert under predetermined rules when the referenced company lists. The first contract, tracking Cerebras, operated for 13 days.

Americans should have access to pre-IPO perpetuals.

Cerebras opened 89% above its IPO price. SK Hynix 14%. SpaceX 11%. Each time, a public market on Hyperliquid signaled the gap before trading began.IPO modernization offers a chance to put that price signal to work for issuers… https://t.co/FAIMrUYHIq

— Hyperliquid Policy Center (@HyperliquidPC) August 18, 2026

The structure avoids some fees, restrictions, and indefinite lockups associated with private-company shares sold through special-purpose vehicles.

However, perpetual contracts can introduce separate risks involving leverage, liquidations, funding rates, oracle pricing, and market manipulation.

Hyperliquid groups promote onchain price discovery

The letter cites five completed TradeXYZ IPOP markets as evidence that public derivatives could improve price discovery before listings.

According to the filing, four US offerings were priced between 10.8% and 38.4% below their corresponding IPOP prices one day before listing. The contracts reportedly moved closer to the equities’ opening prices as their debuts approached.

Every other 24/7 tradfi market on Hyperliquid mirrors a price that already exists somewhere elseBUT pre-IPO markets create one where none has ever traded, which is why I believe they are the most revolutionary product trade[XYZ] has shipped.@HyperliquidPC and @tradexyz filed a… https://t.co/VEuv8GJLiK

— Petro D. | Research (@PDmytriiev) August 18, 2026

HPC and TradeXYZ added that this continuous market signal could help issuers and underwriters evaluate proposed offering ranges. It could prove particularly useful for direct listings, which lack the traditional book-building process used by underwriters.

Because Hyperliquid’s order books operate onchain, trading records are publicly accessible to regulators, issuers, and researchers.

SEC and CFTC face classification questions

The proposal identifies five issues regulators would need to address before introducing IPOPs in the US.

A central question is whether equity-referencing perpetuals should qualify as security futures or security-based swaps. That classification would determine registration, trading venue, clearing, and margin requirements.

The groups called for coordinated SEC-Commodity Futures Trading Commission guidance, instrument-specific disclosures and eligibility rules limiting contracts to companies with publicly announced offerings. They also recommended transparent oracle and settlement policies, protections against insider trading and manipulation, and audit-trail requirements.

For retail access, the letter proposes a phased rollout incorporating leverage and position limits. The SEC has not indicated whether it will adopt the recommendations.