Singapore’s MAS investor alert has reignited debate over Hyperliquid’s permissionless claims, with investor Kyle Samani arguing that a blockchain cannot be truly permissionless until its validator software is fully open source.
Hyperliquid’s claims of operating a permissionless blockchain have come under renewed scrutiny after Singapore’s Monetary Authority (MAS) added the platform to its Investor Alert List (IAL), reigniting debate over whether closed-source validator software is compatible with decentralisation.
The IAL, issued on June 26, is not a ban or enforcement action. Instead, it warns that Singapore residents may mistakenly believe an entity is licensed or authorised by MAS and may not receive regulatory protections if something goes wrong.
Following the listing, investor and Forward Industries Chairman Kyle Samani criticised Hyperliquid’s permissionless claims, arguing that true permissionlessness requires both open-source software and globally distributed validators.
“Hyperliquid is not permissionless. Stop gaslighting the public.” said Kyle Samani, Chairman of Forward Industries.
Samani also criticised the platform’s governance model, arguing that the Hyperliquid Foundation can jail validators, remove them from the active validator set and force software upgrades, undermining validator sovereignty.
Hyperliquid currently operates 24 active validators, with plans to expand to 27. Its validator node repository distributes signed binaries rather than full source code, although the company says it intends to open-source the software once HyperCore reaches feature completion.
Responding to the criticism, Hyperliquid said it has never claimed MAS licensing or authorisation, that users retain full self-custody, all transactions settle transparently on-chain and that nothing about the network has changed.
The dispute comes as MAS continues tightening oversight of offshore crypto exchanges, having instructed unlicensed platforms to obtain regulatory approval or stop serving Singapore residents. Critics have previously questioned Hyperliquid’s decentralisation, while some observers have also scrutinised Samani’s motives because his former firm, Multicoin Capital, previously held exposure to competing protocols.
