North Korean Funds Flood Hyperliquid Amid US Onshoring Push
Hyperliquid, an offshore derivatives exchange favored by US President Donald Trump and the Commodity Futures Trading Commission (CFTC), has seen over $30 million in North Korean laundered funds pass through its platform in the last three weeks. The transactions, identified by blockchain analysis firm Arkham, come at a sensitive time as Hyperliquid seeks to onshore operations within the United States.
The discovery raises questions about whether a decentralized venue can be brought under US regulation without exposing itself to sanctions and avoiding financial risks that DeFi protocols were designed to minimize. President Trump mentioned CFTC Chairman Michael Selig's efforts to make Hyperliquid 'fully compliant and legal' during a meeting at the White House on August 19, causing HYPE, the platform's token, to surge by nearly 17%.
However, critics are pushing regulators to investigate Hyperliquid for price manipulation and sanctions exposure. The CME Group and ICE participated in the meeting but have expressed concerns about the exchange's compliance with regulations. To onshore its operations, Hyperliquid is considering a rental deal with Payward, the parent company of Kraken, which would allow American traders access to specific perpetual futures through Bitnomial, the CFTC-regulated clearinghouse operated by Payward.