The US Department of Justice charged two former Robinhood engineers on Tuesday with commodities fraud and wire fraud for allegedly trading on confidential information about upcoming cryptocurrency listings.
Hefu Chai and Huaisong "Jerry" Xiang allegedly used private company information to buy perpetual contracts linked to tokens ahead of their Robinhood Crypto listings. According to prosecutors, each engineer profited more than $50,000 from trades conducted between 2025 and 2026.
Access to Confidential Information
The DOJ alleged both engineers had access to a private Slack channel containing planned listing details. They were designated as "Coin Aware Individuals" by Robinhood, granting them access to this restricted channel.
According to the charges, Chai worked at Robinhood from around 2021 until May 2026 as a technical lead responsible for digital-asset listings. Xiang was employed from around 2024 until September 2026 as a software engineer involved in crypto listings.
Robinhood's policy prohibited members of this group from trading on any platform 24 hours before or after a listing or delisting announcement.
Scope of Alleged Trading
Prosecutors alleged Chai traded perpetuals ahead of at least 10 announcements involving tokens including MEW, MOODENG, ASTER, XPL, HYPE, ENA, and AERO. Xiang allegedly first traded POPCAT perpetuals in March 2025 before trading ahead of at least 10 other listing announcements.
The case mirrors the 2023 Coinbase insider-trading case, though prosecutors note this case extends into decentralized derivative markets rather than direct token purchases.
Criminal Charges
Each defendant faces one count of violating the Commodity Exchange Act, carrying a maximum sentence of 10 years imprisonment, and one count of wire fraud, carrying a maximum of 20 years.
US Attorney Jamie McDonald stated that corporate insiders cannot evade securities and commodities laws by trading misappropriated information through perpetual futures or similar instruments.
Both defendants are presumed innocent unless convicted. Robinhood did not respond to requests for comment.
