The Hyperliquid Policy Center (HPC) has urged the European Commission to regulate crypto perpetual futures as derivatives under MiFID II, the EU's rulebook for financial instruments first passed in 2014, rather than fold them into the Markets in Crypto-Assets Regulation (MiCA).

HPC made the case in its response to the Commission's MiCA review, which opened on May 20. The Commission extended the submission deadline from Aug. 31 to Sept. 30, and several crypto and banking firms filed responses in the final days of the window.

"The Consultation arrives at a defining moment for financial markets, as public blockchains now serve as infrastructure for markets that trade continuously and in substantial volume, and regulators in several jurisdictions are working through how regulated products can use them," HPC wrote in its response. "We believe the existing EU frameworks can accommodate onchain products and markets through targeted action without a wholesale revision of their rules."

Circle, the issuer of USDC, used its submission to the same review to attack MiCA's stablecoin reserve rules. "Of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated," Circle wrote in a blog post describing its submission. "This suggests the current gap is not in the supply of new regulated issuers, but in MiCA's perimeter capturing the largest global tokens, and in EU-issued e-money token issuers growing at global scale."

Perps under MiFID II

The Washington-based HPC was set up in February and funded with 1 million HYPE tokens, then worth about $29 million, from the Hyperliquid Foundation. The EU filing is its first outside the U.S.

The classification of financial instruments "should follow the economic features of an instrument, and the ledger on which it is recorded should not be determinative," HPC CEO Jake Chervinsky wrote in the letter, dated Sept. 30. Perpetual futures should therefore fall under MiFID II even though they generally trade on onchain venues.

HPC argues MiFID II's Annex I derivative categories already capture perps, so no new legislation is required. "Clarity in application, rather than new legislation, is what would assist in regulating perpetual futures," the group wrote.

HPC also pushed back against treating perps as contracts for difference (CFDs), which the European Securities and Markets Authority restricted for retail traders in 2018. With a CFD, "the provider profits when its client loses," the filing said, while on a perps order book the trading venue is not itself the counterparty.

The group asked the Commission to require trading venues to publish funding methodologies, maintenance margins and liquidation thresholds in advance. It also wants confirmation that placing a regulated product on a public blockchain does not, by itself, change the product's classification.

The filing points to Hyperliquid's HIP-3 markets as a working example. A regulated firm "can build a market on that infrastructure," set leverage limits, restrict access through an onchain allowlist and then "offer that market to its clients as a regulated product," HPC wrote.

At one point in late July, HIP-3 markets accounted for 75% of Hyperliquid's overall trading volume, per The Block's data, though that share has fallen to roughly a quarter in recent weeks.

In August, HPC made a similar pitch to the SEC and CFTC to classify perpetual contracts by economic structure. "The product category has been commercially dormant for many years, though U.S. exchanges returned to it this summer, and its framework will need modernization for new product structures," the group wrote at the time.

Circle targets reserve floors

Circle has issued its dollar-pegged USDC and euro-pegged EURC in the EU through its French entity since July 2024 and describes itself as the largest e-money token (EMT) issuer authorized under MiCA. Patrick Hansen, Circle's director of EU strategy and policy, laid out the company's submission in a blog post published Thursday. Circle declined to share the full filing. "We'll let the blog speak for itself," said Greg Vadala, Circle's senior director of global corporate communications.

Circle's main target is MiCA's bank deposit floor. EMT issuers must currently keep at least 30% of reserves in commercial bank deposits, and 60% if the European Banking Authority deems the token "significant," a label reserved for the largest coins. That rule "increases exposure to the credit and counterparty risk of the banking sector," Circle wrote. The company knows that risk firsthand: USDC briefly lost its $1 peg in March 2023 after Circle disclosed that $3.3 billion of its roughly $40 billion in reserves sat at Silicon Valley Bank, which had just collapsed.

Here Circle has an ally in the European Central Bank. The ECB and the national central banks of the European System of Central Banks also called for scrapping the deposit minimums in their own response, proposing instead that a set share of reserves mature within one and five working days. Circle wrote that it "concur[s] with the ECB" that the floor should give way to a "less rigid minimum asset liquidity requirement."

Circle also wants two limits in the European Banking Authority's technical standards removed. One caps exposure to any single government at 35% of reserves, which Circle said makes it "impossible" for dollar-denominated tokens to hold mostly sovereign debt such as U.S. Treasurys. The other caps an issuer's exposure to any one bank at 1.5% of that bank's total assets. Under that limit, large issuers would need reserve relationships with "dozens of separate banks," per Circle.

Circle's other priority is protecting multi-issuance, the arrangement under which a MiCA-authorized EU entity and a foreign-regulated affiliate co-issue the same global stablecoin. According to Circle, this is currently the only way tokens like USDC can operate inside MiCA at all.

"Restricting multi-issuance would simply relocate that usage outside the EU's regulatory perimeter," Circle wrote, pointing to the Commission's own 2020 impact assessment, which warned that a ban on foreign stablecoins would push EU users toward offshore providers without MiCA's protections. The ESCB, for its part, said MiCA needs "legal clarification" on whether third-country multi-issuer schemes are permissible in the first place.

Other filings

Deutsche Börse Group filed on Sept. 29, proposing a separate category for "settlement EMTs" used as the cash leg in regulated settlement systems and warning that "settlement fails can cascade." Deutsche Börse announced a $200 million strategic investment into Payward, the parent of the Kraken exchange, earlier this year.

Tech industry group Chamber of Progress filed on Sept. 30, arguing consumers should be able to earn rewards on e-money tokens — which MiCA's interest ban currently restricts — and backing multi-issuance with enforceable EU redemption rights.

The Commission's review will now determine whether perps, reserve composition and multi-issuance get recalibrated within MiCA's existing perimeter, with any legislative follow-up shaped by the consultation responses filed before the Sept. 30 deadline.