Hyperliquid and Circle Push Brussels to Rewrite

Two Crypto Firms, Two Different Battles Inside MiCA’s First Major Review

The European Commission’s review of the Markets in Crypto-Assets regulation has drawn formal submissions from two of the industry’s most prominent names – Hyperliquid’s policy group and stablecoin issuer Circle – each targeting a different pressure point in the existing framework. Their filings, submitted ahead of the review process, arrive as regulators prepare to assess whether MiCA’s initial design holds up against the realities of how crypto markets actually operate.

The two submissions share little common ground beyond their destination. Hyperliquid wants perpetual futures brought inside the regulatory perimeter of MiFID II, Europe’s established financial instruments directive. Circle, meanwhile, is pushing to remove a specific floor requirement tied to bank deposits embedded in MiCA’s stablecoin reserve rules. Together, the filings sketch a picture of an industry that views the review not as an obstacle but as an opening.

Hyperliquid’s Case for MiFID II Coverage of Perpetual Futures

Hyperliquid’s policy center is arguing that perpetual futures – synthetic, expiry-free derivatives that have become the dominant trading instrument across centralized and decentralized crypto venues – should be classified and regulated under MiFID II rather than left in a regulatory gap. The argument is straightforward: perps function like financial derivatives, attract institutional and retail capital alike, and carry the same systemic risks as regulated instruments, yet currently sit outside the framework that would otherwise govern them in European markets.

The implications of that gap are not minor. Perpetual futures dominate global crypto trading volume by a wide margin, and their exclusion from MiFID II means venues offering them to European users operate without the conduct, transparency, and capital requirements that apply to comparable traditional finance products. Hyperliquid’s filing positions MiFID II inclusion as a matter of regulatory consistency rather than expansion – the argument being that the instruments already exist at scale and the question is only whether they carry oversight with them. For a platform that has built its identity around a high-performance decentralized derivatives exchange, pushing for a clear regulatory category also serves a strategic interest: rules create barriers that favor established, compliant players over unregulated competitors.

Circle Takes Aim at MiCA’s Bank Deposit Floor

Circle’s submission focuses on a specific structural requirement within MiCA’s stablecoin reserve rules – the mandate that a portion of reserves backing euro-denominated stablecoins must be held as bank deposits. The company is asking the European Commission to remove or revise that floor, arguing it introduces concentration risk rather than reducing it.

The concern is grounded in how bank deposits behave under stress. When a stablecoin issuer is required to hold a fixed share of reserves in commercial bank accounts, that issuer becomes exposed to the credit risk of those institutions. Circle’s position is that sovereign debt, central bank accounts, or other high-quality liquid assets offer stronger protection for reserve holders than a deposit floor that ties stablecoin safety to the health of private banks. The 2023 collapse of Silicon Valley Bank – which briefly caused Circle’s USDC to depeg after the company disclosed $3.3 billion in reserves held there – gives the argument historical weight, though Circle’s filing addresses the MiCA rule on its structural merits rather than citing that event directly.

MiCA as written requires that at least 30% of reserves for significant stablecoins be held in bank deposits, a threshold that rises to 60% for issuers deemed systemically important. Circle has expanded aggressively into European markets with EURC, its euro-pegged stablecoin, and the deposit floor creates ongoing operational and risk management complexity for an issuer trying to maintain a conservative reserve posture. The filing asks regulators to trust the issuer’s capacity to manage reserves prudently rather than locking in a structure that concentrates exposure to bank counterparties.

Whether the Commission finds that argument persuasive depends partly on how it weighs the original intent of the deposit floor – which was to keep stablecoin money flowing through the regulated banking system – against the risk management logic Circle is presenting. European banking regulators have historically favored rules that keep large pools of capital connected to supervised institutions, which puts Circle’s request in direct tension with a design choice that was deliberate, not accidental.

What the Review Process Can Actually Change

MiCA formally took full effect in December 2024, and the review process now underway is the first structured opportunity for the European Commission to assess how the regulation is functioning and where amendments may be warranted. Industry submissions form part of the evidence base regulators consider, but they compete with input from national competent authorities, consumer groups, academic researchers, and other stakeholders who may hold very different views on what MiCA needs.

The submissions from Hyperliquid and Circle are calibrated asks – neither company is arguing that MiCA is fundamentally flawed. Both are working within the framework’s logic to request targeted changes that would benefit their specific business models and product categories. That approach tends to be more effective in regulatory processes than broad opposition, and it signals a maturation in how crypto-native firms engage with European institutions. The contrast with ongoing U.S. regulatory uncertainty makes Europe’s structured review process – whatever its outcome – look like a relatively stable playing field.

The Stakes Behind the Policy Language

The practical stakes behind both submissions are significant. If the European Commission accepts Hyperliquid’s argument and extends MiFID II to cover perpetual futures, every venue offering perps to European users would face licensing, conduct, and reporting requirements that do not currently apply. That could reshape market structure in the region, driving volume toward compliant platforms and away from offshore venues operating without regulatory authorization. It would also give Hyperliquid a potentially cleaner path to European institutional clients who are constrained by their own compliance requirements from using unregulated venues.

Circle’s ask, if granted, would give stablecoin issuers more flexibility in how they construct reserve portfolios – a change with direct implications for yield, risk profile, and operational costs. The current deposit floor creates an ongoing negotiation between Circle and its banking partners over where reserves sit, at what terms, and under what conditions. Removing it would let Circle optimize reserves for safety and liquidity rather than satisfying a structural mandate tied to a particular asset class.

The review timeline has not been finalized, and there is no guarantee either submission will produce the specific changes each company is seeking. What is clear is that the MiCA review will define the next phase of European crypto regulation – and the gap between what Hyperliquid wants for derivatives and what Circle wants for reserves captures a central tension in the framework: whether crypto markets are best regulated by mapping them onto existing financial categories, or by building rules that reflect how these instruments actually work. That question doesn’t resolve itself cleanly, even with the right lobbying.