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- Samani says Hyperliquid’s validator controls weaken its permissionless blockchain claim.
- Hyperliquid says the MAS alert is not a ban, enforcement action, or fraud finding.
- Debate shifts to whether validator independence defines permissionless blockchain status.
Multicoin Capital managing partner Kyle Samani challenged Hyperliquid over its claim of being permissionless blockchain infrastructure, saying the decentralized trading protocol remains more centralized than it suggests after its recent inclusion on Singapore’s Investor Alert List sparked wider scrutiny.
The dispute followed a statement from Hyperliquid about the Monetary Authority of Singapore notice. The protocol said the listing was not a ban, enforcement action, or finding of wrongdoing. It also said it never claimed to be licensed by MAS.
Hyperliquid said it operates as permissionless infrastructure. It added that network activity had not changed after the listing. The project also said users continue to hold their own assets.
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Hyperliquid Faces Scrutiny Over Validator Governance Model
Samani rejected that position in a public response. He said Hyperliquid was not permissionless. He also accused the project of misleading the public about its structure.
His criticism focused on validator control and network design. Samani said a permissionless blockchain should be open source. He also said validators should be spread across global locations.
According to Samani, Hyperliquid does not meet that standard. He argued that validator concentration weakens its decentralization claim. His remarks placed new attention on how the protocol defines permissionless access.
Samani also criticized the role of the Hyperliquid Foundation. He said the foundation can place a validator in jail. He added that it can remove validators from the active set.
He also alleged that validators must accept protocol upgrades. Samani said those controls conflict with independent validator operation. In his view, that model does not match permissionless blockchain principles.
The comments came after Hyperliquid tried to reassure users. The protocol said the MAS Investor Alert List is a consumer warning tool. It said the list identifies firms that may be mistaken for regulated entities.
Hyperliquid Says MAS Notice Is Not an Enforcement Action
The project said the notice should not be treated as an allegation of fraud. It also said it should not be viewed as a ban on operations. Hyperliquid pointed to similar listings involving other crypto platforms.
The Singapore alert has still increased attention on the platform. It has also raised questions about how DeFi projects describe their legal and technical status. Regulators continue to examine crypto services used by local investors.
Hyperliquid said it remains open to working with regulators and institutions. It also said it supports clear rules for on-chain finance. The statement aimed to separate its network activity from licensing questions.
Samani’s comments pushed the debate beyond the MAS notice. His argument centered on whether validator governance can coexist with a permissionless label. The issue now involves control, transparency, and upgrade authority.
The exchange shows how decentralization claims are facing closer review. For Hyperliquid, the key question is whether self-custody and on-chain settlement are enough. Samani argues that validator independence must also be part of the test.
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