Bloomberg: Hyperliquid is currently controlled by a small group of insiders and lacks formal regulatory oversight

BlockBeats News, October 17, according to Bloomberg, Hyperliquid is currently controlled by a small group of insiders, raising questions about its degree of decentralization. For its backers, including Paradigm and Pantera Capital, it is both a bet on the future of digital finance and a reminder that the entire industry still operates outside formal regulatory frameworks.

Essentially, Hyperliquid is a minimalist trading platform operated by Hyperliquid Labs, a Singapore-based team of about 15 people. As is customary in the industry, the website frontend blocks US users, but anyone can trade on the blockchain that supports it. The lack of identity verification is precisely what makes it attractive, echoing an early pattern: rapidly growing trading platforms with similar models often quickly attract regulatory attention.

If HLP is likened to an engine, then validator nodes are the control room. Hyperliquid has about 24 validator nodes, whereas the Ethereum network has over one million. Critics argue that this leads to excessive concentration of power. Hyper Foundation controls nearly two-thirds of the staked HYPE—its native token—thus wielding significant influence over validator node decisions and governance, although in several recent decisions, its nodes have chosen to abstain in order to respect community consensus.

Kam Benbrik, Head of Research at blockchain validator node company Chorus One, stated, "If you control more than two-thirds of the staked tokens, you can basically achieve control over the chain." Currently, Washington's relatively relaxed stance provides Hyperliquid with room to grow. The question is, how much longer can it continue to operate outside the regulatory spotlight?