Hassan Maishera
TL;DR
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Two former Robinhood engineers face commodities and wire-fraud charges.
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Prosecutors allege they traded perpetual futures using confidential token-listing information.
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Each defendant allegedly earned more than $50,000 through trades on Hyperliquid.
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Robinhood said it investigated the activity and reported it to authorities.
Two former Robinhood engineers have been charged with allegedly using confidential information about upcoming cryptocurrency listings to place profitable trades on Hyperliquid.
The US Department of Justice accused Hefu Chai and Huaisong Xiang of commodities fraud and wire fraud. Prosecutors claim the pair misappropriated nonpublic information from Robinhood Crypto and used it to trade perpetual futures before listing announcements moved token prices.
Each defendant allegedly generated more than $50,000 in profits through the scheme.
Engineers Allegedly Traded Ahead of Robinhood Listings
According to prosecutors, Chai, 36, and Xiang, 30, repeatedly opened positions in cryptocurrency perpetual futures between 2025 and 2026 after learning in advance which tokens Robinhood planned to list.
They allegedly executed the trades through Hyperliquid, a decentralized platform specializing in perpetual futures. Public listing announcements would typically increase interest in the affected tokens, potentially benefiting positions established beforehand.
US Attorney Jamie McDonald said trading derivatives using misappropriated corporate information remains illegal, regardless of whether the instruments are perpetual futures, tokenized securities or other similar products.
Chai and Xiang each face one count of commodities fraud under the Commodity Exchange Act. That charge carries a maximum prison sentence of 10 years.
They also face one count of wire fraud, which carries a maximum sentence of 20 years. Statute sets the maximum penalties, while a judge would decide any eventual sentence.
The allegations have not yet been proven, and both defendants are presumed innocent unless convicted.
Robinhood Reported the Alleged Activity
Robinhood said it has no tolerance for insider trading and maintains policies covering confidential information about new cryptocurrency listings.
A company spokesperson said Robinhood immediately investigated the suspected misconduct and reported it to law enforcement and regulators. The brokerage said it would continue cooperating with the investigations.
The case follows the Justice Department’s 2022 prosecution of a former Coinbase product manager and two associates over trades placed using confidential token-listing information.
That case involved trading the underlying cryptocurrencies. The Robinhood allegations differ because Chai and Xiang are accused of expressing their positions through perpetual-futures contracts.
The distinction could make the case particularly important for enforcement involving crypto derivatives. It signals that authorities may pursue individuals who trade around confidential information even when they avoid buying or selling the underlying tokens directly.
Scrutiny of Suspicious Hyperliquid Trades Intensifies
Hyperliquid has previously attracted attention over unusually well-timed positions.
In October 2025, a trader reportedly opened Bitcoin and Ethereum short positions shortly before President Donald Trump announced 100% tariffs on China. The trades allegedly produced between $150 million and $200 million in profits.
The trader was later linked to former BitForex CEO Garrett Jin, who denied possessing insider information or having connections to the Trump family. No wrongdoing was established by the timing alone.
