Hyperliquid Faces Fresh Decentralization Debate After Singapore MAS Warning

Hyperliquid is facing renewed scrutiny after prominent investor and entrepreneur Kyle Samani accused the decentralized trading platform of overstating its permissionless nature. The criticism follows the Monetary Authority of Singapore (MAS) adding Hyperliquid to its Investor Alert List (IAL), raising fresh questions about the platform’s governance, decentralization, and regulatory standing.

On June 26, Singapore’s financial regulator placed Hyperliquid on its Investor Alert List, a registry that identifies companies consumers may mistakenly believe are licensed or regulated by MAS. The listing is not a ban or enforcement action, but it serves as a warning that users may not be protected under Singapore’s regulatory framework if issues arise while using the platform.

In response, Hyperliquid clarified that it has never claimed to be licensed or authorized by MAS. The platform emphasized that its infrastructure remains unchanged, highlighting that users maintain full self-custody of their assets while all transactions continue to settle transparently on-chain. Hyperliquid also stressed that the regulatory notice does not affect its operations.

The MAS has increased oversight of offshore cryptocurrency exchanges throughout 2026, requiring unlicensed platforms serving Singapore residents to either obtain regulatory approval or discontinue offering services locally. Earlier this month, crypto exchange Bybit also appeared on the same Investor Alert List.

Samani, chairman of Forward Industries, argued that Hyperliquid does not meet the standards of a truly permissionless blockchain. According to him, a permissionless network should be fully open source and supported by validators distributed across multiple jurisdictions rather than concentrated in one location.

He also questioned Hyperliquid’s governance model, claiming the Hyperliquid Foundation has the authority to remove validators from the network without providing justification. Samani further alleged that the foundation can require validators to install mandatory software updates, reducing their independence and limiting operational control.

Some of these concerns stem from Hyperliquid’s current network design. The blockchain presently operates with 24 active validators, with plans to increase that number modestly to 27. Additionally, its node software is distributed as a signed binary instead of fully open-source code. Hyperliquid has previously stated that it intends to release the complete source code once HyperCore development reaches full feature completion.

The criticism is not entirely new. Hyperliquid has repeatedly faced questions from industry observers regarding the level of decentralization across its ecosystem. The project has consistently defended its architecture while arguing that its roadmap includes further decentralization over time.

Samani’s comments have also prompted debate about potential conflicts of interest. His departure from Multicoin Capital in February 2026 has drawn attention because the investment firm previously maintained significant exposure to blockchain projects that compete with Hyperliquid. As a result, some community members have questioned whether competitive interests may influence his public criticism.

As regulatory oversight of cryptocurrency platforms continues to expand globally, Hyperliquid’s response to both regulators and industry critics could play an important role in shaping investor confidence and institutional adoption. The ongoing debate over decentralization, validator governance, and transparency is likely to remain central as the platform seeks to strengthen its position in the rapidly evolving digital asset market.