Two Robinhood engineers were charged with using confidential token-listing information to place profitable crypto derivatives trades on Hyperliquid.
On Sept. 15, the Federal prosecutors accused Hefu Chai and Huaisong “Jerry” Xiang of trading perpetual futures tied to tokens they allegedly knew Robinhood Crypto planned to list, earning more than $50,000 each.
These charges extend insider-information enforcement into a part of crypto markets where confidential information held at one company can be monetized through derivatives traded on a separate decentralized platform.
Both men face one count of commodities fraud and one count of wire fraud. The charges carry statutory maximum sentences of 10 years and 20 years, respectively.
Chai worked at Robinhood from about 2021 until May 2026 and served as a technical lead involved in new digital-asset listings, prosecutors said. Xiang worked as a software engineer from about 2024 through September 2026.
Their positions allegedly gave them access to a private Slack channel containing upcoming listing plans. Both were designated “Coin Aware Individuals,” employees permitted to receive information about whether and when Robinhood Crypto would make new tokens available.
Robinhood’s policies barred those employees from trading while holding material nonpublic information and restricted them from trading affected assets on any platform before an announcement and for 24 hours afterward.
US Attorney Jamie McDonald said:
“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. Today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments.”
Prosecutors said Chai traded on at least 10 occasions between 2025 and January 2026. Xiang allegedly traded around a March 2025 POPCAT listing and on at least 10 other occasions through February 2026.
Prosecutors focus on the window before Robinhood's public announcements
The government’s case centers on the gap between when a token became tradable on Robinhood and when the company publicly announced the listing.
Robinhood tokens could begin trading as much as an hour before an announcement, prosecutors said, creating a window in which employees with advance knowledge could potentially exit positions before the broader market received the news.
In one example, Xiang allegedly learned around Jan. 23, 2026, that Robinhood planned to list RENDER on Jan. 29. Prosecutors said he opened long RENDER perpetual-futures positions around the listing date and closed them at a profit after the token became available on Robinhood but before the public announcement.
Chai allegedly used a similar strategy involving HYPE. Prosecutors said he learned around Oct. 16, 2025, that Robinhood planned to list the token the following week, then opened HYPE perpetual positions around Oct. 23 and exited profitably after trading began on Robinhood but before the announcement.
Those trades were placed on Hyperliquid, a decentralized derivatives venue where perpetual futures allow traders to speculate on token prices without holding the underlying assets.
The case now puts the alleged use of confidential listing information in decentralized derivatives markets before a federal court, potentially testing how prosecutors apply commodities-fraud statutes when the information source and trading venue are separate.
Robinhood cooperated with the investigation, the Justice Department said. The company may also face pressure to reassess how it segments listing information internally and monitors employee trading restrictions across external crypto venues as prosecutors pursue the case.
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