Federal prosecutors have charged two Robinhood engineers with commodities fraud and wire fraud for allegedly using confidential information about planned cryptocurrency listings to make profitable trades on the Hyperliquid derivatives exchange.
Hefu Chai and Huaisong Xiang, also known as Jerry Xiang, both worked as engineers at Robinhood Markets during the period of the alleged trading activity. According to prosecutors, they had access to confidential information about which cryptocurrencies Robinhood intended to list before public announcements were made.
Between 2025 and 2026, the defendants allegedly used this nonpublic information to trade perpetual futures contracts on Hyperliquid, opening positions linked to cryptocurrencies ahead of Robinhood's listing announcements. Prosecutors claim the engineers profited as prices moved following the announcements, with both defendants allegedly making over $50,000 in trades related to Robinhood's private listing efforts.
The Hyperliquid Trading Platform
Hyperliquid operates as a decentralized derivatives exchange offering perpetual futures contracts based on cryptocurrencies and other assets. These contracts allow traders to speculate on price movements without owning the underlying assets. Unlike traditional futures with fixed expiration dates, perpetual futures can be maintained indefinitely, with funding payments used to track underlying market prices.
Legal Allegations
According to the complaints, Chai and Xiang repeatedly purchased perpetual futures contracts prior to Robinhood announcing new cryptocurrency listings, while possessing material nonpublic information. Prosecutors say the defendants violated their obligations to safeguard Robinhood's confidential information.
U.S. Attorney Jamie McDonald stated that misappropriating confidential information to trade in derivatives markets for personal benefit violates the law, and that derivatives products do not provide an exception to securities and commodities laws.
FBI Assistant Director James C. Barnacle Jr. said the charges demonstrate that federal authorities will take action against the misuse of corporate information obtained through employment.
Proceedings
Chai was scheduled to appear in the Northern District of California, while Xiang was set to appear before U.S. Magistrate Judge Ona T. Wang. Both defendants are presumed innocent until prosecutors prove their guilt beyond a reasonable doubt in court.
