Multicoin Capital and the Hyperliquid Policy Center filed a joint comment letter to the CFTC on July 27, advocating for the agency to serve as the sole federal regulator of prediction markets under the Commodity Exchange Act. The filing supports the CFTC's proposed Regulation 40.11 framework designed to establish federal oversight standards for prediction market contracts. The submission comes as monthly combined volumes in prediction markets recently exceeded $50 billion, with approximately $44.8 billion recorded in June 2026 across major venues, moving these contracts from niche products to significant financial instruments requiring regulatory clarity.
Joint Letter Outlines Three Core Regulatory Arguments
The comment letter targets the CFTC's proposed Regulation 40.11 and presents three core arguments. First, prediction markets should fall under exclusive federal oversight through the Commodity Exchange Act, eliminating patchwork state regulations and jurisdictional conflicts. Second, the CFTC should employ a settlement-based assessment to evaluate what activities these contracts involve, judging products by how they resolve and pay out rather than by the underlying topic they reference. Third, the CFTC should publicly disclose its decision-making processes when evaluating these markets. The letter was submitted on July 27.
Hyperliquid Launched Fully Collateralized Outcome Contracts in May 2026
Hyperliquid launched its outcome contracts through a protocol upgrade called HIP-4 in May 2026. The contracts are fully collateralized in USDC and non-leveraged. Settlement occurs based on objective sources vetted by the platform's validators, distributing responsibility across a validator set. The Hyperliquid Policy Center, which co-signed the CFTC letter, functions as the protocol's regulatory engagement arm.
Multicoin Holds Over $40 Million in HYPE Despite Samani Criticism
Kyle Samani co-founded Multicoin Capital and departed the firm in early February 2026. Since his departure, Samani has publicly criticized Hyperliquid. Multicoin Capital holds over $40 million in HYPE tokens according to available information. Samani built Multicoin into an influential venture firm with a deep relationship with Solana, having participated in major funding rounds for the Layer 1 blockchain. The firm's institutional direction has diverged from its co-founder's personal views.
Letter Advocates Settlement-Based Federal Framework
The joint filing advocates for a single federal regulator with clear rules based on settlement mechanics. The letter argues that state-by-state regulatory variations would create compliance complexity. Hyperliquid designed its products around full collateralization and decentralized settlement. The letter notes that registration requirements for prediction market exchanges exist as a consideration for protocols operating in the US market.
FAQ
What did Multicoin Capital and Hyperliquid file with the CFTC on July 27?
Multicoin Capital and the Hyperliquid Policy Center filed a joint comment letter on July 27 supporting the CFTC's proposed Regulation 40.11 framework for prediction markets. The letter advocates for the CFTC to serve as the sole federal regulator under the Commodity Exchange Act.
How does Hyperliquid's outcome contract system work?
Hyperliquid launched outcome contracts via the HIP-4 protocol upgrade in May 2026. The contracts are fully collateralized in USDC, non-leveraged, and settle based on objective sources vetted by the platform's validator set rather than a centralized entity.
What is the relationship between Multicoin Capital and Kyle Samani?
Kyle Samani co-founded Multicoin Capital and departed the firm in early February 2026. Since leaving, Samani has publicly criticized Hyperliquid, while Multicoin Capital holds over $40 million in HYPE tokens and partnered with Hyperliquid on the CFTC filing.
