Multicoin Capital and Hyperliquid Back CFTC Proposal to Regulate Prediction Markets

Multicoin Capital and the Hyperliquid Policy Center have submitted a joint comment letter to the U.S. Commodity Futures Trading Commission (CFTC), endorsing the agency's proposed approach to overseeing prediction markets. Filed on July 27, the letter argues that the CFTC should serve as the primary federal regulator for prediction-market contracts under the Commodity Exchange Act. The submission arrives amid an unusual backdrop. Kyle Samani, a cofounder of Multicoin Capital who left the firm in early February 2026, has publicly criticized Hyperliquid. Yet Multicoin is reported to hold more than $40 million in HYPE tokens, underscoring a divergence between the firm's current positioning and its departed cofounder's views. Three pillars of the comment letter The comment focuses on the CFTC's proposed Regulation 40.11, aimed at standardizing oversight for prediction markets. It makes three main points: 1) Exclusive federal oversight under the Commodity Exchange Act. The authors call for a single federal framework rather than a state-by-state regulatory patchwork. 2) A "settlementbased assessment" for evaluating contracts. The letter says regulators should assess these products based on how they settle and pay out, not on the subject matter they reference. For example, an election contract settles in dollars, not in votes. 3) Greater transparency in CFTC decision-making. The letter urges the agency to publicly disclose how it reaches determinations when reviewing prediction markets. Growing scale of prediction markets The filing comes as prediction markets expand beyond niche use cases. Combined monthly volumes have recently topped $50 billion, with about $44.8 billion recorded in June 2026 across major venues. Hyperliquid's approach Hyperliquid introduced its outcome contracts through the HIP4 protocol upgrade in May 2026. The contracts are fully collateralized in USDC and nonleveraged. Settlement relies on objective sources reviewed by the platform's validators, distributing settlement responsibility across a validator set rather than concentrating it within a single company. The Hyperliquid Policy Center, which co-signed the letter, appears to operate as the protocol's regulatory engagement arm. Investor takeaways The Multicoin&Hyperliquid Policy Center letter effectively advocates for a single federal rulebook with technology-neutral standards. A fragmented regime where states apply conflicting rules would raise compliance costs and operational complexity. For platforms structured around full collateralization and decentralized settlement, a CFTC framework focused on settlement mechanics could prove supportive. The key uncertainty is whether any registration requirements for prediction market exchanges could push protocols to centralize core functions or withdraw from the U.S. market.