Kraken tests compliant HIP-3 DEX on Hyperliquid with 10 wallets

A Hyperliquid testnet deployer using Kraken's name has whitelisted 10 wallets and tested three compliance controls.

A deployer called "Kraken HIP-3 test DEX" activated Star gating on Hyperliquid's testnet on Aug. 19, whitelisting 10 wallets and testing three of five compliance controls, Blockworks analyst Shaunda Devens reported Aug. 22.

"The deployment has added 10 wallets to its approved-user list and tested three of five compliance controls observed on the testnet," Devens said. A validator has also been registered under the name "Kraken Exchange Validator."

The observed tools let a deployer cancel a user's open orders, close positions through reduce-only orders, and move collateral. Each action gives the deployer direct control over an account or position, which an operator could use to restrict access, respond to sanctions or legal orders, reduce risk, and remove funds when rules require intervention.

Neither Kraken nor Hyperliquid had publicly confirmed a partnership or test when this report was written. Hyperliquid's testnet allows permissionless deployments, meaning an unrelated user could create a market or validator carrying the exchange's name.

HIP-3 lets outside builders run perpetual markets

HIP-3, active on mainnet since Oct. 13, 2025, allows independent builders to operate perpetual futures markets through HyperCore, Hyperliquid's trading engine. A builder must stake 500,000 HYPE to operate an independent perpetual exchange without approval from the core team. Deployers choose listed assets, price oracles, collateral, margin requirements, leverage limits, and funding settings. HIP-3 open interest surpassed $1.43 billion as of July 3, with contracts tracking equities and commodities becoming seven of Hyperliquid's 10 largest markets by trading volume.

Permissioned functions would modify that model. A deployer using Star gating could limit trading on its own market to approved wallets, combining public blockchain settlement with identity checks, location restrictions, or other account-level rules.

Kraken's regulated expansion adds context

The testnet name has attracted attention partly because Kraken and its parent Payward have spent 2026 adding securities, tokenized assets, and on-chain trading services. On Aug. 18, the exchange launched U.S. stock trading for eligible customers across the European Economic Area, covering more than 7,000 traditional U.S.-listed stocks, over 700 xStocks, and more than 600 crypto assets. xStocks have generated more than $38 billion in transaction volume since June 2025.

Earlier in 2026, Kraken introduced xChange, an on-chain execution system supporting more than 70 tokenized equities across Ethereum and Solana. Through a July agreement with GTN, Payward plans to add Hong Kong shares before expanding to the United Kingdom, Europe, South Korea, and other approved markets.

For U.S. users, a permissioned HIP-3 deployment would not by itself make on-chain perpetual contracts legally available. Commodity derivatives offered to American retail traders generally must operate through entities registered with the CFTC, which approved the listing of a Bitcoin perpetual futures contract on a registered exchange in May 2026.

Risk controls also matter because HIP-3 deployers select their own price sources. On July 28, a Hyperliquid contract tracking SK Hynix shares fell 17.9% intraday after a single unusually low trade on South Korea's NextTrade entered the contract's oracle system. The contract, operated by Trade.xyz under HIP-3, fell from about $1,128 to $927 before recovering above $1,100.

If Kraken does launch a compliant HIP-3 market, it could attract institutional capital into DeFi and set a precedent for other centralized exchanges. The deployment remains unconfirmed, but the testnet activity suggests Hyperliquid is building the infrastructure for regulated operators.

This article is for informational purposes only and does not constitute investment advice.