The parent company of the New York Stock Exchange (NYSE), Intercontinental Exchange (ICE), is pushing for regulatory changes that would allow traditional finance (TradFi) institutions to compete with decentralized exchanges in the rapidly growing market for 24/7 onchain perpetual futures. Speaking at a Bernstein conference on Wednesday, ICE CEO Jeffrey Sprecher emphasized the need for a "level playing field," arguing that regulators are currently "prohibiting us from doing this when it's already happening."
Perpetual futures, or "perps," are derivative contracts that allow traders to speculate on the price of an asset without an expiration date. They have become a cornerstone of the cryptocurrency ecosystem, with platforms like Hyperliquid processing billions of dollars in daily volume. Hyperliquid, a decentralized exchange (DEX) powered by its own layer-1 blockchain, has emerged as a dominant player, ranking as the seventh-largest DEX by trading volume on CoinGecko and the fourth-largest fee-generating protocol in crypto, generating $15.6 million in weekly fees.
ICE's Regulatory Push and Industry Context
Sprecher's comments underscore a broader tension between innovation and regulation in financial markets. He revealed that ICE has held exploratory discussions with Hyperliquid to understand the technology and market dynamics behind onchain perps. "We want to learn from them," Sprecher said, acknowledging that Hyperliquid's 11-person team has built a platform that, by some measures, rivals legacy exchanges like Nasdaq in terms of user engagement and value creation. While Hyperliquid's daily trading volume of $195 million is far smaller than Nasdaq's multi-billion-dollar averages, Sprecher's remarks highlight the disruptive potential of decentralized trading venues.
The push for regulatory parity comes just weeks after ICE invested in cryptocurrency exchange OKX at a $25 billion valuation in March 2024. That partnership has already yielded tangible results: on May 22, OKX announced the launch of perpetual futures based on ICE's Brent crude and West Texas Intermediate (WTI) crude benchmarks—two of the world's most widely followed oil price indicators. These products mark the first initiative under the ICE-OKX collaboration and signal a growing convergence between traditional commodity markets and crypto-native trading instruments.
Beyond perps, ICE has also been exploring broader blockchain applications. In March, the NYSE partnered with tokenization platform Securitize to develop infrastructure for 24/7 stock trading and settlement. This aligns with a global trend where traditional exchanges are experimenting with blockchain rails to reduce settlement times and enable round-the-clock trading—a feature long demanded by retail and institutional investors alike.
The Rise of Hyperliquid and Its Implications
Hyperliquid has become a focal point in the debate over onchain perps. The platform, which launched in late 2023, has grown rapidly by offering low fees, high speed, and a user-friendly interface. Its native token, HYPE, has attracted significant attention from investors, with Bitwise Chief Investment Officer Matt Hougan calling it "one of the most mispriced assets in crypto today" because the market still evaluates it as just a perp DEX rather than the emerging "super-app" it is becoming.
Hyperliquid's expansion goes beyond perps. On Tuesday, the platform launched canonical prediction markets for offchain events, adding another layer of functionality. This move positions Hyperliquid as a one-stop shop for decentralized finance (DeFi) activities, from trading to speculation on real-world outcomes. The platform's growth has created multiple new billionaires, according to Sprecher, underscoring the wealth-generation potential of permissionless finance.
However, regulators have been slow to adapt. In the United States, the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) have yet to provide clear guidance on onchain perps, leaving a regulatory gray area that decentralized platforms exploit. Sprecher argued that this asymmetry harms traditional exchanges like NYSE, which must comply with rigorous oversight while unregulated offshore platforms capture market share. "We are being asked to compete with one hand tied behind our back," he said.
Historical Context: From Nightly Settlement to 24/7 Trading
The push for 24/7 trading is not new. Stock markets have historically operated during fixed hours—typically 9:30 a.m. to 4:00 p.m. Eastern Time in the U.S.—with settlements taking two days (T+2) or more. But the rise of cryptocurrencies, which trade around the clock, has changed investor expectations. Retail traders, in particular, demand the ability to enter and exit positions at any time, a feature that crypto exchanges have offered for over a decade.
The transition to 24/7 trading on traditional exchanges has been gradual. In 2020, the NYSE moved to T+2 settlement, and in 2021, it proposed expanding trading hours, though regulators have not approved those changes. Meanwhile, tokenization platforms have emerged as a workaround: by representing stocks as tokens on a blockchain, platforms like Securitize enable near-instant settlement and 24/7 trading without altering the underlying exchange's rules.
ICE's latest push for onchain perps represents a more direct approach. Instead of tokenizing existing stocks, the company wants to offer futures contracts that trade continuously, using blockchain rails to manage margin and settlement. This would allow TradFi institutions to compete directly with crypto derivatives exchanges like Binance, Bybit, and Hyperliquid, which collectively process tens of billions of dollars in daily volume.
The Commodities Angle: Oil Futures Go Onchain
A key aspect of ICE's strategy involves commodities. The partnership with OKX to list Brent and WTI perps is a significant step, as these benchmarks underpin global oil pricing. By enabling 24/7 trading of these contracts, ICE and OKX aim to attract a new class of traders—crypto-native investors who may not have access to traditional futures markets but are familiar with perpetual contracts.
Oil perps are particularly appealing because they offer exposure to a highly liquid asset class with strong price volatility. Brent crude, for example, sees daily swings of 2-3%, making it attractive for leveraged trading. However, critics warn that bringing oil futures to an unregulated market carries risks, including price manipulation and systemic leverage. ICE, as a regulated exchange, would need to ensure that its onchain perps comply with CFTC oversight, which may limit some of the features that make cryptocurrency perps so popular, such as high leverage and minimal know-your-customer (KYC) requirements.
The ICE-OKX partnership also highlights the growing trend of Tradfi-DeFi integration. OKX, a centralized exchange that operates under various global licenses, represents a bridge between the two worlds. By backing OKX with a $25 billion valuation, ICE has signaled its belief that crypto and traditional markets will converge, rather than compete.
Regulatory Challenges and Future Outlook
Sprecher's call for a level playing field faces significant hurdles. U.S. regulators have been wary of crypto derivatives, citing concerns about investor protection and market integrity. The CFTC, which oversees futures trading, has taken enforcement actions against several crypto exchanges for illegally offering perps to U.S. customers. At the same time, the SEC has argued that many crypto tokens are securities, meaning that perps based on them would fall under its jurisdiction.
To overcome these challenges, ICE is likely lobbying for a tailored regulatory framework—one that allows traditional exchanges to offer onchain perps while maintaining consumer safeguards. This could involve requiring futures to be backed by stablecoins or tokenized versions of Treasury bonds, which are increasingly used as collateral in crypto markets.
Meanwhile, the UK is also moving forward with near-24/7 settlement systems to prepare markets for tokenization, as reported by Cointelegraph. This suggests that the regulatory momentum is building globally, even if U.S. action lags.
Hyperliquid, for its part, continues to expand. Its recent launch of prediction markets and its growing user base make it a formidable competitor. However, its decentralized nature—and the fact that it operates outside traditional regulatory boundaries—raises questions about long-term sustainability. If regulators crack down, platforms like Hyperliquid could face sanctions, giving regulated players like ICE an opening.
For now, ICE's focus remains on learning from the crypto sector rather than directly copying it. Sprecher's comments at the Bernstein conference reflect a recognition that the financial industry is undergoing a fundamental shift. "We cannot ignore what is happening," he said. "The market is demanding 24/7 access, and we need to provide it in a way that is safe, transparent, and regulated."
As the lines between TradFi and DeFi blur, the battle for the future of trading will be fought not only in boardrooms but also in the halls of regulators. Whether ICE and its peers can secure a level playing field will determine whether Wall Street or the crypto natives dominate the next era of financial markets.
Source: Cointelegraph News