The money hasn't reached American hands.

Written by: Lin Wanwan

When you subscribe to a new stock, at least four companies are dividing the money with you in the process: the broker, the underwriter, the custodian, and the trading platform.

Each of them takes a cut of the money. Of course, this is a common rule for A shares, U.S. stocks, and Hong Kong stocks, which has not changed for over a hundred years.

On May 13, 2026, two century-old trading platforms in Chicago and New York suddenly discovered that a trading website had bypassed all these money-grabbing points.

It is registered in Singapore, founded by a young Chinese man who graduated from Harvard, and has only 11 employees serving global users. A few days later, the two century-old trading platforms in Chicago and New York joined forces to approach U.S. regulators, demanding that the website be shut down.

That night, four top investment banks as lead underwriters priced the IPO of AI chip company Cerebras at $185 per share.

Cerebras's benchmark competitor is Nvidia; this is the largest tech IPO of 2026 so far, raising $5.5 billion and the largest since Uber went public in 2019.

The underwriting fee is charged at 4% to 7% of the total IPO amount; that night, the four investment banks divided approximately $220 million to $380 million in underwriting commissions.

This money enters their U.S. accounts, pays U.S. corporate income tax, distributes bonuses to U.S. employees, who then pay U.S. personal income tax. Every link is a tax collection point for the U.S. Treasury.

At the same time, on a website called Hyperliquid, Cerebras's Pre-IPO perpetual contract is being traded, with the contract code $CBRS, launched on May 1.

The Pre-IPO perpetual contract refers to an agreement where a company has not yet gone public, but you can place an order online betting on its future stock price. Hyperliquid provides this order placement service.

On May 13, that day, the contract quoted $291, 57% higher than the $185 set by the four investment banks. The 24-hour trading volume reached $230 million.

Hyperliquid charges about 0.025% as a matching fee, equivalent to $57,500.

This money enters a blockchain account, does not pay U.S. corporate income tax, and does not go through any Wall Street intermediaries.

Of course, compared to the hundreds of millions split by the four investment banks that night, $57,500 is just a drop in the bucket.

But the fact that a drop became news is because it points to a future that makes the U.S. Treasury very uncomfortable: assets worldwide can be traded on-chain 24/7, and the U.S. won't collect a dime in taxes.

Two days later, on the afternoon of May 15, 2026, Bloomberg's exclusive news arrived.

The Chicago Mercantile Exchange (CME) and the parent company of the New York Stock Exchange (ICE) joined forces to approach the CFTC (U.S. Commodity Futures Regulatory Agency) and congressional representatives, demanding that Hyperliquid must accept U.S. regulation, implement mandatory real-name verification, and mandatory trading surveillance.

Their reasoning was "market manipulation" and "sanctions evasion."

The term compliance in the U.S. financial system does not equate to "legality." More often, it refers to whether the U.S. can derive corresponding benefits from it.

Hyperliquid has not violated U.S. laws, but it has not paid taxes to the U.S.

This might be the reason CME and ICE brought Hyperliquid to the CFTC.

Hyperliquid bypassed the tax authority

The earliest event that made CME and ICE feel something was wrong happened over the weekend of February 28, 2026.

On that day, the U.S. and Israel conducted a joint airstrike on Iran. Iran is the fourth largest oil producer in OPEC, and the Strait of Hormuz carries one-third of global maritime oil transport.

However, it was a Saturday, and the CME in Chicago closed, ICE in London closed, SGX in Singapore closed. From Friday afternoon in New York to Sunday evening, global oil prices were frozen.

The week before the war, the daily trading volume of the WTI crude oil perpetual contract on Hyperliquid was about $21 million. After the outbreak of war that weekend, the daily trading volume of the same contract surged to $1.7 billion, nearly 250 times.

On March 20, JPMorgan released a research report authored by top analyst Nikolaos Panigirtzoglou. His report on global capital flows was on the tables of the world's largest hedge funds, sovereign funds, and central banks.

He used a very restrained phrase in that report:

"CME traders were unable to react at all."

This means that a transaction that should have been completed at CME, where clearing fees were paid, commissions generated, and ultimately became a part of U.S. GDP, was instead completed on Hyperliquid, leaving nothing in the U.S.

In early May, CFTC Chair Michael Selig publicly stated at an industry conference that blockchain platforms like Hyperliquid could start to affect the spot and futures prices of registered platforms.

In the afternoon of May 14, Cerebras rang the bell, opening at $350. The next day, May 15, in the afternoon, Bloomberg’s exclusive news.

From the launch of HIP-3 to the JPMorgan report, to Cerebras ringing the bell, to that Bloomberg exclusive, a total of 214 days. Over a hundred years of protection was torn open in just seven months by a piece of code.

So, to understand why U.S. regulators are so concerned about a company with only 11 employees, one must first see how Hyperliquid bypassed the entire tax collecting system.

Hyperliquid launched in 2023 and was co-founded by Jeff Yan, who grew up in Palo Alto in a Chinese immigrant family and was raised by a single mother who is an accountant.

In 2012, he represented the U.S. team and won a silver medal at the International Physics Olympiad, and the following year gold. He received a full scholarship to Harvard. After graduating, he worked at Hudson River Trading (a top global quantitative trading firm) and later started a market-making firm named Chameleon Trading in Puerto Rico.

After the collapse of FTX in 2022, he and an anonymous Harvard classmate started to create a fully on-chain, 24/7 trading platform with no company, just a program. They then made a counter-Silicon Valley decision not to raise VC funding.

Yan openly refused VC offers valuing the company at billions. His reasoning was:

"If we want to create a truly neutral platform for everyone to build upon, there can't be any insiders. VCs holding a lot of tokens will become scars on this network."

He used the profits from his trading company to fund the entire project. The team size remained between 10 and 14 people. In November 2024, Hyperliquid launched the token HYPE, with 31% directly airdropped to early users, one of the largest user distributions in cryptocurrency history, leaving not a dime for VCs.

By the end of 2025, this team of 11 accounted for 70% of the market share of on-chain perpetual contracts, with a total trading volume of $29 trillion in 2025, exceeding the combined total of Coinbase International, Crypto.com, and HTX.

Perpetual contracts are a derivative invented in the crypto circle, roughly equivalent to "futures that do not expire." Traditional futures have a delivery date; when they expire, they must be closed. Perpetual contracts have no delivery date; you can hold positions indefinitely, which is suitable for betting on short-term price fluctuations. Hyperliquid is the largest matching platform for this type of contract.

But for traditional finance, these are still internal affairs of the crypto circle. CME glances at it occasionally, while ICE doesn't look at all.

Until October 13, 2025, Hyperliquid launched an upgrade called HIP-3.

The rules of HIP-3 state that anyone can open a new market on this program by staking about $25 million worth of Hyperliquid tokens as collateral and trading anything. U.S. stocks, bonds, foreign exchange, commodities, or even valuations of private companies that haven't gone public.

This step transformed the power to open new markets from "requiring regulatory approval" to "just pay."

In the months following HIP-3's launch, more than 250 U.S. stock perpetual contracts appeared on-chain, for Tesla, Nvidia, Apple. Perpetual contracts synthesizing OpenAI's valuation and SpaceX's valuation were subsequently launched. Hyperliquid obtained official authorization for on-chain perpetual contracts of the S&P 500, followed by Cerebras Pre-IPO perpetual.

The margin for the WTI crude oil perpetual contract is in USDC, a stablecoin pegged 1:1 to the U.S. dollar, unrelated to crypto tokens. The orders placed here are by hedge fund traders betting on oil prices.

By early 2026, the markets on HIP-3 contributed 30% of Hyperliquid's daily trading volume, with oil and gas and precious metals accounting for 67%.

The system bypasses not just compliance issues. It bypasses the entire path of tax collection in the U.S. financial infrastructure.

The dominance of CME has little to do with its matching speed. In terms of matching speed, CME falls far short of Hyperliquid.

The reason CME is CME is because of its identity. Registered entities within the U.S. report to the SEC and CFTC, pay taxes to the IRS, and settle fees to the U.S. Treasury. It is a part of the U.S. sovereign financial system.

Hyperliquid's scale today does not rely on technology either. Technologically, Binance, Coinbase, and CME can produce similar things.

What makes Hyperliquid special is its on-chain settlement, serving global users, and that its profits do not go through the U.S. system at all.

However, this breach that has torn open the moat has little to do with technology and much to do with tax authority.

What CME and ICE Care About

To understand why CME and ICE are so tense, first, look at two names.

CME is the trading platform you hear about in the news when oil prices, corn, or gold futures rise or fall; it was founded in Chicago 178 years ago and is the largest derivatives trading platform in the world.

ICE is another century-old giant, owning the New York Stock Exchange (NYSE) and the London Brent Crude Oil Futures, and it nearly monopolizes U.S. soybean, cotton, and coffee futures.

Together, these two essentially represent the "pricing power" of U.S. traditional financial infrastructure.

Let’s look at their complaint, which accuses Hyperliquid of three things: oil price manipulation, being used by sanctioned countries to evade sanctions, and insider trading. It sounds legitimate.

But the following facts reveal the true purpose of this complaint unquestionably.

As early as three months before Bloomberg's report titled "CME and ICE Push U.S. Regulators to Suppress Cryptocurrency's New Oil Trading Power," on February 19, 2026, CME had already announced that its crypto futures and options would start 24/7 trading on May 29, with only a 2-hour maintenance window each week.

On May 14, the day Cerebras rang the bell, just one day before Bloomberg's report, CME announced it would launch cryptocurrency index futures in partnership with Nasdaq on June 8.

CME tells people that "round-the-clock trading is non-compliant," while it itself is set to start around-the-clock trading. On one hand, it claims that "on-chain markets distort prices," while on the other hand, it is working on tokenization and considering launching its own tokens.

The story on ICE's side is similar.

In October 2025, ICE announced a $2 billion investment in prediction markets, valued at $9 billion. By March 2026, ICE's total investment in prediction markets reached $1.64 billion.

In prediction markets, users can bet on the outcomes of future events, such as which candidate will be elected or which stock will rise.

Like Hyperliquid, it bypassed the CFTC's comprehensive regulation and is considered by the industry as "the on-chain barbarian."

But ICE holding $1.64 billion in prediction markets means that a large portion of the future profits will return to the U.S. in the form of ICE shareholder dividends, entering the U.S. tax system.

In March 2026, ICE also invested in OKX (one of the largest cryptocurrency trading platforms globally), valued at $25 billion. In January 2026, ICE announced the construction of an on-chain securities infrastructure. The NYSE is developing a 24-hour tokenized securities platform.

Crypto analyst ZachXBT's questioning on X can be summed up in one sentence:

"ICE invests $1.64 billion into prediction markets while lobbying against Hyperliquid; why not be concerned about prediction markets as well?"

When these matters are considered together, CME and ICE are not opposing decentralization, 24-hour trading, or on-chain trading.

What they are opposing is on-chain trading from which they have no equity, cannot take intermediary fees, and from which the U.S. Treasury collects no taxes.

Prediction markets have ICE as a U.S. shareholder mediating, making them compliant. OKX has ICE's investment and is moving towards compliance.

Hyperliquid has nothing, so it is non-compliant.

The boundary between compliance and non-compliance may not be as simple as stated in the three reasons in the complaint.

$29 million is not a legal fee

Hyperliquid probably already knew this day would come.

On February 18, 2026, it donated $29 million to a Washington nonprofit organization called Hyperliquid Policy Center. The CEO is Jake Chervinsky, one of the most seasoned lawyers in Washington's crypto circle. The policy advisors come from Sullivan & Cromwell, one of Wall Street's oldest law firms, which provided legal services to Rockefeller and Morgan a century ago.

The chief policy officer was named the top lobbyist for four consecutive years by The Hill, the most authoritative policy influence list in Washington's political circle.

K Street is a street north of the White House in Washington, where the largest lobbying firms in America congregate; "K Street" in the American political context is a metonym for "lobbying groups."

Hyperliquid hires the most expensive people on this street.

On the same day Bloomberg published its report on May 15, Jeff Yan himself had met with policymakers in Washington.

This $29 million is documented on the accounts as legal service and policy consulting fees, but viewed through the lens of funding flows, it resembles Hyperliquid's down payment for a ransom.

Hyperliquid is actively converting part of its profits into a form that the U.S. system can extract. Legal fees will be paid by partners at Sullivan & Cromwell in U.S. income taxes.

Compliance costs will turn into salaries for a group of consultants and lawyers in Washington, who also pay U.S. income tax. Potential future CFTC registration fees will go directly into the U.S. Treasury. Potential fines are also included.

Jake Chervinsky is titled as legal advisor, but his actual role is that of a payee. Sullivan & Cromwell is titled as a law firm, but its actual function is as a channel. The lobbyists on K Street are titled as policy advisors, but their actual function is as intermediaries.

This is the necessary path for every crypto-native project to move from "barbarity" to "compliance."

Coinbase has walked this path, facing lawsuits from the SEC, investigations, and fines, ultimately going public on the NYSE and becoming a compliant company. Binance has walked this path, reaching a $4.3 billion settlement with the U.S. Department of Justice, CFTC, and Treasury in 2023, with founder Changpeng Zhao convicted and imprisoned, while Binance continues to operate. Kraken has walked it; Ripple has walked it.

Their commonality is that after being penalized enough, they transformed into "compliant" companies.

Another meaning of "compliance" is that every transaction they make is now processed through the U.S. system. Commissions are taxed, employees are taxed, and shareholder returns are taxed. The period of time when they were able to slip past the eyes of the U.S. Treasury is essentially over.

Hyperliquid's $29 million is just the beginning.

If the CFTC ultimately forces it to register, it will face two choices.

The first choice is to accept registration, become a compliant company, lose its existing global anonymous user base, and turn into another Coinbase.

The second choice is to refuse registration, be blocked from U.S. IPs, cut off from USDC channels, sued by founders, and become another BitMEX (a crypto trading platform that was prosecuted by the U.S. Department of Justice for non-compliance in 2020, with the founder ultimately pleading guilty).

Between these two options may be other possibilities, but it’s hard to imagine which option would allow Hyperliquid to continue its current business. That is, a business where the $57,500 matching fee can completely bypass the U.S. Treasury.

Using code to bypass regulation may be becoming increasingly difficult.

A large enough on-chain market will eventually face a choice: either find a way to give the U.S. Treasury a share of the profits or bear the consequences of being expelled from the U.S. market.