Two Robinhood engineers have been charged by the US Department of Justice over allegations that they used confidential company information to trade cryptocurrency derivatives for personal profit.
Hefu Chai, 36, of Menlo Park, California, and Huaisong Xiang, 30, of Jersey City, New Jersey, are accused of accessing non-public information about upcoming cryptocurrency listings on Robinhood Crypto and using that data to trade perpetual futures on Hyperliquid before the listings were announced publicly.
The Alleged Scheme
According to complaints unsealed by the Southern District of New York, the two engineers repeatedly purchased perpetual futures contracts linked to tokens that Robinhood was preparing to list. Prosecutors allege they executed these trades on Hyperliquid ahead of Robinhood's public announcements, following this pattern between 2025 and 2026. Each defendant allegedly made more than $50,000 from the trading activity.
Criminal Charges
Both men have been charged with commodities fraud and wire fraud. The commodities fraud charge carries a maximum prison sentence of 10 years, while the wire fraud charge carries a maximum of 20 years. Chai is scheduled to appear in federal court in Northern California, while Xiang will appear before a federal magistrate judge in New York.
US Attorney Jamie McDonald stated that the charges demonstrate that corporate insiders cannot evade securities and commodities laws by trading on misappropriated information, whether through derivatives like perpetual futures, tokenized securities, or other financial instruments.
Similar Case
The charges recall an earlier high-profile case involving Jane Street Group. In 2022, New York prosecutors accused the major Wall Street trading firm of using a private Telegram channel to communicate with insiders at Terraform Labs regarding the stablecoin TerraUSD (UST). Prosecutors alleged that Jane Street used this early access to sell approximately $192 million worth of UST before the token collapsed in May 2022.
