On February 18, 2026, Hyperliquid — the decentralized exchange that processed over $250 billion in perpetual futures trading in a single month — launched a Washington, D.C.-based policy center backed by 1 million HYPE tokens worth approximately $29 million. The move marks the clearest signal yet ...
"We're not here to play defense anymore. We're here to help Congress and federal agencies understand how decentralized finance actually works, and to help them write rules that make sense for it." — Jake Chervinsky, CEO, Hyperliquid Policy Center
On February 18, 2026, Hyperliquid — the decentralized exchange that processed over $250 billion in perpetual futures trading in a single month — launched a Washington, D.C.-based policy center backed by 1 million HYPE tokens worth approximately $29 million. The move marks the clearest signal yet that DeFi protocols have graduated from defending against regulators to actively writing the rules they'll operate under.
But this isn't just a Hyperliquid story. It's the culmination of a multi-year, multi-billion-dollar transformation of crypto's relationship with American political power. The industry spent $290 million through PACs in the 2024 election cycle alone, achieving a 91% win rate for its preferred candidates. Lobbying expenditures jumped 66% in 2025 to $40.6 million. And now, individual protocols are establishing their own permanent policy shops — not just funding trade associations, but building bespoke legislative machines.
The question is no longer whether DeFi will be regulated. It's who gets to write the regulation.
The Hyperliquid Policy Center (HPC) is not a side project. It is an independent nonprofit research and advocacy organization led by Jake Chervinsky — formerly Chief Legal Officer at the Blockchain Association and a board member of the DeFi Education Fund — with a team that includes Brad Bourque from Sullivan & Cromwell as Policy Counsel and Salah Ghazzal from Variant as Policy Director.
This is Sullivan & Cromwell talent being redirected from advising Wall Street incumbents to shaping DeFi regulation. The hiring pattern alone tells you how seriously the industry now treats Washington.
The HPC's stated mission is narrow but strategically potent: create a legal framework for perpetual derivatives. Perpetual futures — contracts with no expiration date that allow leveraged trading — are the single most traded instrument in all of crypto, generating trillions in annual volume. Yet they exist in a regulatory void in the United States. No clear jurisdiction. No licensing framework. No path to legality for American users.
Hyperliquid's motivation is transparent: the protocol processed over $250 billion in perp trading volume in January 2026 alone, with cumulative volume exceeding $2.7 trillion. Bringing perpetual futures onshore under a favorable regulatory framework would open the floodgates to U.S. capital that is currently locked out.
What makes the HPC launch significant is not the dollar amount — $29 million is meaningful but not unprecedented. It's the architectural pattern it reveals. Crypto's Washington presence has evolved into a layered stack:
Tier 1 — Broad Trade Associations:
These organizations represent the industry at large, lobbying on cross-cutting issues like tax treatment, securities classification, and banking access.
Tier 2 — Sector-Specific Advocacy:
These groups drill into technical regulatory questions that matter to specific protocol architectures.
Tier 3 — Chain-Specific Institutes:
These advocate for specific Layer 1 ecosystems, arguing that their technical properties deserve tailored regulatory treatment.
Tier 4 — Protocol-Branded Policy Centers:
This is new. A single protocol establishing its own permanent Washington office, funded by its own token, to shape regulation around its core product.
The evolution from Tier 1 to Tier 4 represents a fundamental maturation. Early crypto lobbying was defensive — stop the SEC from classifying everything as a security. The new model is offensive — write specific rules for specific instruments on specific protocols.
The financial trajectory tells the story of an industry that discovered political spending works.
Lobbying Expenditures (Federal):
Electoral Spending (2024 Cycle): Fairshake, the crypto industry's flagship super PAC, and its affiliated groups (Defend American Jobs, Protect Progress) deployed a combined $290 million in the 2024 election. The results were decisive: a 91% win rate across 58 targeted races, seating 53 crypto-friendly members of Congress.
The top donors reveal who is bankrolling crypto's political apparatus:
As of late 2025, Fairshake and its affiliates held $194 million in reserves for the 2026 midterm cycle. This is no longer episodic campaign spending. It is a permanent political infrastructure.
The shift from PAC spending to protocol-level lobbying represents the next logical step. PACs buy access. Lobbying shops write policy. Protocol policy centers do both — and they do it with the technical credibility that trade associations often lack.
The HPC is launching into a legislative window that will define DeFi's legal standing for the next decade.
The Digital Asset Market Clarity Act (CLARITY Act), introduced by House Financial Services Committee Chairman French Hill, would establish a comprehensive regulatory framework for digital assets. Its core mechanism: grant the CFTC exclusive jurisdiction over "digital commodity" spot markets while maintaining SEC jurisdiction over investment contract assets.
On the Senate side, the Agriculture Committee published a draft version of the Digital Commodity Intermediaries Act on January 21, 2026, advancing it out of committee on January 29. The Banking Committee is working on parallel legislation. Both drafts must be reconciled and merged before a full Senate vote, and any Senate bill must then be reconciled with the House CLARITY Act.
Key provisions being debated:
In February 2026, the CFTC and SEC signaled a new era of harmonization at a joint "Project Crypto" event, suggesting the interagency hostility of the Gensler era has been replaced by coordinated rulemaking. The HPC's timing is not coincidental.
Why is Hyperliquid spending $29 million to legalize perpetual futures specifically? Because the economics are staggering.
Decentralized perpetual futures exchanges processed over $2 trillion in cumulative volume in recent months, with Hyperliquid capturing approximately 38% market share — down from a peak of 80% in August 2025, but still dominant. The protocol generates over $1.2 million in daily fees.
Yet every dollar of this volume is, technically, unavailable to American traders. Perpetual futures have no expiration date, which means they don't fit neatly into existing CFTC frameworks for futures contracts. They lack a central clearinghouse, which is how traditional derivatives markets manage counterparty risk. And they're offered on decentralized platforms where there is no licensed intermediary to regulate.
The result: a multi-trillion-dollar market that operates entirely offshore relative to U.S. regulation. American capital — institutional and retail — is locked out, or participates through gray-market workarounds.
If the HPC succeeds in creating a legal pathway for perpetual derivatives, the addressable market expands dramatically. Institutional capital that currently cannot touch decentralized perps would gain a compliant on-ramp. The protocol that wrote the rules would have first-mover advantage in compliance.
This is the core economic logic: spend $29 million on lobbying to unlock access to trillions in capital. The return on investment, if successful, would be measured in orders of magnitude.
From the economic value distribution framework that defines how value flows through blockchain ecosystems, lobbying represents a new category of protocol expenditure — one that doesn't show up in on-chain fee analysis but may ultimately determine more value than any technical upgrade.
Consider the cost-benefit calculation:
This is rational capital allocation. For comparison, Coinbase spent $75 million on PAC contributions in 2024 and saw its stock price roughly triple as the regulatory environment shifted from hostile to favorable. The industry's collective $290 million in 2024 election spending bought a Congress that is now actively legislating in crypto's favor rather than investigating it.
But there's a tension worth examining. When protocols fund their own policy centers, the line between education and regulatory capture blurs. The HPC frames itself as a research and education organization. But its funding comes from a protocol with a direct financial interest in the rules it advocates for. This isn't necessarily problematic — every industry lobbies for favorable treatment — but it should be understood clearly for what it is: strategic investment disguised as public interest advocacy.
The broader ecosystem question is whether protocol-level lobbying creates a two-tier system where well-funded protocols shape regulation to their advantage, while smaller projects without Washington offices are left to comply with rules they had no hand in writing.
DeFi has a K Street strategy now. The launch of the Hyperliquid Policy Center marks the arrival of protocol-level lobbying — individual protocols funding permanent Washington offices to shape regulation around their specific products.
The numbers are serious. Crypto lobbying hit $40.6 million in 2025 (up 66% YoY). Fairshake holds $194 million for the 2026 midterms. Hyperliquid committed $29 million to a single policy center. This is permanent political infrastructure, not campaign-cycle spending.
Perpetual futures are the prize. The HPC's top priority — creating a legal framework for perpetual derivatives — would unlock U.S. access to a multi-trillion-dollar market currently operating entirely offshore.
The legislative window is now. The CLARITY Act, the Digital Commodity Intermediaries Act, and CFTC-SEC harmonization efforts are all converging in 2026. Whatever rules emerge will define DeFi's legal landscape for a decade.
Protocol lobbying raises capture questions. When the entities writing policy proposals have billions in direct financial exposure to the outcome, the distinction between education and regulatory capture deserves scrutiny.
The Hyperliquid Policy Center is a $29 million bet that the era of crypto regulation by enforcement is over, and the era of regulation by legislation has begun. For years, DeFi protocols operated on the assumption that decentralization was a regulatory shield — that code deployed to permissionless networks was beyond the reach of any single jurisdiction. That theory was always fragile, and the enforcement actions of 2023-2024 shattered it entirely.
What replaced it is more pragmatic and potentially more powerful: if you can't avoid regulation, write it yourself. The industry has moved from funding lawyers to fight SEC subpoenas to funding policy centers that draft legislative text. The shift from defense to offense mirrors what the energy, pharmaceutical, and financial services industries did decades ago — transform from regulated entities into regulatory participants.
Whether this produces good policy or entrenched incumbency depends on whether the legislative process remains open to diverse stakeholders or gets captured by the protocols with the deepest war chests. The $29 million question isn't whether DeFi will be regulated. It's whether the regulation will serve users, or the protocols that paid for it.