Cboe and Citadel’s Shocking Legal Battle to Halt US Stock Perps: What’s Really at Stake in Hyperliquid’s $5 Billion Market?
Just when you thought the battle for market dominance couldn’t get any juicier, a powerhouse group backed by Cboe and Citadel Securities steps into the ring to sue the CFTC—on the very same day the regulator gave the green light to stock perpetual futures on U.S. exchanges. Talk about timing! This legal showdown isn’t just a courtroom spectacle; it could fundamentally reshape whether Hyperliquid’s booming $5 billion-a-day market makes its debut to American traders or remains an offshore playground. CFTC Chairman Michael Selig warns Americans shouldn’t be “forced to turn to offshore, and often unregulated, venues” for trading these products—highlighting the high stakes involved. So, what’s really at risk here? And can Hyperliquid, with its massive trading volumes, crack into the U.S. market amidst this tug-of-war? Buckle up—this fight might answer some surprising questions about innovation, regulation, and who really wins in the world of perpetual futures. LEARN MORE.
A group backed by Cboe and Citadel Securities sued the CFTC on Tuesday, November 3, to block stock perps hours after the regulator cleared them for US exchanges, a fight that could decide whether Hyperliquid’s $5 billion-a-day market reaches American traders.
The approval named no offshore venue, but it was aimed at one.
CFTC Chairman Michael Selig said Americans should not be “forced to turn to offshore, and often unregulated, venues” to trade perpetual futures on individual stocks.
🇺🇸 A CBOE AND CITADEL SECURITIES-BACKED GROUP SUES THE CFTC TO BLOCK PERPETUAL FUTURES ON US STOCKS, THE SAME DAY THE CFTC APPROVED THEM pic.twitter.com/38PNXGcM5f
— The Wolf Of All Streets (@scottmelker) November 3, 2026
The biggest of those venues runs on Hyperliquid. Trade.xyz, its largest builder market, did $4.99 billion in volume over the past 24 hours across 142 contracts on stocks, indexes and commodities, with $4.42 billion in open interest.
Six days ago, NYSE owner ICE agreed to bring those markets to US traders through a CFTC-regulated exchange of its own. HYPE jumped as much as 21% that day, to $97.74, just short of its $97.96 record.
The lawsuit didn’t knock it over. HYPE dipped to $81.01 early Wednesday and was back at $85.93 by 08:00 UTC, up 2.8% in 24 hours.
So what is the lawsuit about, and what does it mean for perp DEXs like Hyperliquid?
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Cboe and Citadel Suing to Block Stock Perps: What Is the Lawsuit About?
Who gets to regulate single-stock perpetuals? The Capital Markets Alliance, whose members include Cboe, Citadel Securities and the Healthy Markets Association, filed in federal court in Manhattan. It argues the contracts are security-based swaps, which belong to the SEC and are kept away from retail investors.
The group wants the court to:
- Vacate the CFTC’s approval, which came without a vote under its Regulation 40.3
- Declare the contracts security-based swaps
- Freeze trading while the case runs
“This issue, however, is about investor protection for securities trading and the rule of law,” Cboe CEO Craig Donohue said.
The CFTC hit back. “Our markets should be governed by law, not litigation campaigns intended to block innovation,” a spokesperson said.
Four exchanges are waiting on the outcome. Kalshi filed first, on September 18, followed by Coinbase Derivatives, Bitnomial and Crypto.com’s North American Derivatives Exchange. CME Group is already suing the CFTC over Kalshi’s Bitcoin perpetual, approved in May.
How Big Are Stock Perps on Hyperliquid?
Big enough to rival its crypto markets. Hyperliquid’s own crypto perpetuals did $7.14 billion over the same 24 hours, so trade.xyz’s markets made up about 41% of everything traded on the chain.
Indexes and oil lead, but single stocks fill most of the list:
- S&P 500: $571 million, with leverage up to 50x
- SK hynix: $375 million, more than any US stock
- Nvidia: $257 million, at up to 20x
- SanDisk and SpaceX: $247 million and $198 million
Trade.xyz launched in October 2025 as the first market built on HIP-3, Hyperliquid’s system that lets outside teams list their own contracts. It now handles about 98% of HIP-3 volume and says it has processed $650 billion in total trading.
It is built for traders outside the US. Hyperliquid blocks US users on its own front end, and that is the gap Selig wants US exchanges to fill.
What Could the Lawsuit Mean for Hyperliquid?
Very little for its markets today, and a lot for its path into the US. The case can’t touch trades on Hyperliquid itself. What it decides is whether American exchanges can compete for the same flow, and whether ICE can bring trade.xyz onshore.
The two outcomes cut in opposite directions:
- If the alliance wins: single-stock perpetuals become SEC products, closed to retail. Kalshi and Coinbase can’t list them, and offshore venues keep the business. But ICE’s US venue loses its stock contracts, the part of the plan that set it apart, though crypto, commodity and currency perps would still be allowed.
- If the CFTC wins: US exchanges can list stock perpetuals, and Coinbase and Kalshi get the first shot at the American traders Hyperliquid can’t serve. ICE and trade.xyz could join them, which is the outcome last week’s HYPE rally bet on.
Neither will happen soon. ICE’s exchange still needs its own CFTC approval, and neither company has given a launch date.
The first real test comes sooner. The court still has to decide whether to freeze the approval while the case runs. A freeze would stall US listings before Kalshi or Coinbase trade a single contract.
EXPLORE: HYPE Jumps +23% as CFTC Pathway Raises Hyperliquid US Market Hopes
HYPE Price Analysis: Can It Get Back to $90?
HYPE has given back most of last week’s ICE spike. It hit $97.74 on October 29, slid back over the next few days, and now trades at $85.93, just above its 20-day EMA of $84.02.
The daily chart shows a clear range:
- $89.99: the October 30 close, which no daily close has topped since
- $97.74: the October 29 high, just under the $97.96 record
- $81.01: Wednesday’s low, where buyers stepped in after the lawsuit news
- $74.45: the October 24 low, the bottom before the ICE deal
HYPEUSDT 1D chart. Source: TradingView
| Outlook | Trigger | Level to watch |
|---|---|---|
| Rebound | A daily close above $89.99 | $97.74, the October 29 high |
| Holding pattern | HYPE stays between $81.01 and $89.99 | Sideways until the court rules on the freeze |
| Sell-off | A daily close below $81.01 | $74.45, the October 24 low |
For now, the fight over stock perps is about who can sell them to Americans. Hyperliquid already sells them to everyone else, $5 billion a day of it.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Daniel Frances is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. A crypto native since 2017, Daniel leverages his background in on-chain analytics to author evidence-based reports and deep-dive guides. He holds certifications from The Blockchain Council, and is dedicated to providing “information gain” that cuts through market hype to find real-world blockchain utility.
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