Federal prosecutors have charged two Robinhood engineers, Hefu Chai and Huaisong Xiang, with commodities and wire fraud, alleging they used confidential information about planned crypto listings to trade perpetual futures on Hyperliquid.
According to Jamie McDonald, U.S. Attorney for the Southern District of New York, the two allegedly stole confidential information from their employer to trade perpetual futures for personal benefit. "Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal," McDonald said in a statement on Tuesday. "That is exactly what we allege Hefu Chai and Huaisong Xiang have done."
Prosecutors allege that between 2025 and 2026, Chai, 36, and Xiang, 30, bought perpetual futures linked to crypto tokens on Hyperliquid ahead of Robinhood's public announcements that those tokens would be listed on Robinhood Crypto. The complaint against Chai alleges he traded ahead of at least 10 listing announcements, while the complaint against Xiang alleges at least 11 such occasions. Each allegedly profited more than $50,000 from the trades. If convicted, they could each face up to 10 years in prison.
Both were reportedly designated "Coin Aware Individuals," a group with access to a private Slack channel containing information about planned listings. Robinhood's policy barred those employees from trading the tokens on any platform before, and for 24 hours after, a public listing announcement.
"Robinhood takes market integrity seriously and has zero tolerance for insider trading," a Robinhood spokesperson said in an email statement. "We immediately investigated and reported this matter to law enforcement and regulators, and will continue to cooperate with their investigations."
