CZ Praises Hyperliquid As OKX CEO Questions His Aster Ties

Binance founder Changpeng Zhao praised Hyperliquid’s trading infrastructure while warning that its no-KYC model creates regulatory exposure he would not personally accept.

In a preview of his Galaxy Brains interview, CZ called Hyperliquid’s innovation “actually awesome” and said the platform occupies a market segment Binance cannot easily compete in because users can trade without conventional identity verification.

Hyperliquid combines a fully onchain order book with zero-gas order placement, low fees and leverage of up to 40x across hundreds of perpetual and spot markets. Trades, funding payments and liquidations are processed through its own high-performance Layer 1 rather than an offchain matching engine controlled by a centralized exchange.

CZ’s praise came with a warning. He said he would never operate a platform in the same way after his own experience with U.S. authorities and added that Hyperliquid must have strong legal counsel.

Zhao pleaded guilty in 2023 to failing to maintain an effective anti-money laundering program at Binance and served a four-month prison sentence in 2024. The case turned compliance, customer identification and sanctions controls into central parts of Binance’s operating model.

Star Xu Challenges CZ Over Aster

OKX founder and CEO Star Xu responded by questioning whether CZ’s regulatory warning was consistent with his support for Aster, a competing decentralized perpetual exchange.

In a direct challenge to the Binance founder, Xu alleged that Aster operates as a separate shell while copying much of Hyperliquid’s model. He pointed to shared personnel, ecosystem resources and repeated promotion from CZ, asking how different the businesses really are if their people, incentives and product designs remain closely connected.

The shell characterization has not been established independently. Several links between CZ’s ecosystem and Aster are public, however.

CZ has confirmed that Aster employs former Binance personnel and that YZi Labs holds a minority stake in the project. YZi Labs, the investment firm formerly known as Binance Labs, also includes Aster in its portfolio, while CZ has promoted the exchange and its token on multiple occasions.

Aster emerged as one of Hyperliquid’s most visible competitors after combining a non-custodial perpetual platform with BNB Chain distribution, trading incentives and support from the wider CZ-linked investment ecosystem. Its rapid rise previously pushed Aster above $2 billion in total value locked, although incentives and volatile reported volumes complicated comparisons with Hyperliquid.

Hyperliquid’s Growth Intensifies The Compliance Fight

The dispute reflects a larger struggle over who can operate high-performance derivatives markets without adopting the full compliance model used by centralized exchanges.

Hyperliquid’s growth has moved it beyond a niche DeFi platform. Its share of global perpetual open interest recently reached a record 8.3%, putting its onchain order books into direct competition with centralized exchanges that employ large compliance teams and restrict access by jurisdiction.

That scale has also attracted scrutiny from traditional derivatives operators. Hyperliquid has already faced criticism over sanctions exposure, anonymous trading and commodity-linked contracts after CME and ICE raised concerns about its oil markets.

CZ’s comments acknowledge the source of Hyperliquid’s advantage: it offers fast, non-custodial trading without the onboarding restrictions that constrain Binance and other regulated exchanges. Xu’s response shifts attention to whether Aster is pursuing a similar market through a structure kept formally separate from Binance.