Key Points
- US prosecutors charged two former Robinhood engineers with commodities fraud and wire fraud over alleged trades made using confidential information about upcoming crypto listings.
- Prosecutors allege each engineer earned more than $50,000 by trading Hyperliquid perpetual contracts before Robinhood announced token listings.
- The case highlights growing scrutiny of insider trading involving crypto derivatives and decentralized trading platforms.
Former Robinhood Engineers Allegedly Traded Ahead of Listings
US prosecutors have charged two former Robinhood engineers with allegedly using confidential information about upcoming cryptocurrency listings to profit from perpetual futures trades on Hyperliquid.
The US Department of Justice alleges that Hefu Chai and Huaisong “Jerry” Xiang accessed internal information about planned Robinhood Crypto listings and used that knowledge to establish positions in token-linked perpetual contracts before public announcements.
According to the allegations, each defendant generated more than $50,000 in profits from trades conducted between 2025 and 2026. Prosecutors allege the positions were closed after the tokens were listed on Robinhood and their prices increased.
The case adds another layer to the broader scrutiny of employees using confidential exchange or platform information to trade digital assets before market-moving announcements.
Internal Access Gave Engineers Advance Listing Information
According to the complaints, Chai worked at Robinhood from approximately 2021 until May 2026 and served as a technical lead involved in new digital-asset listings. Xiang worked at the company from around 2024 until September 2026 as a software engineer involved in crypto listings.
Both were reportedly designated as “Coin Aware Individuals,” a group that had access to a private Slack channel containing information about planned cryptocurrency listings.
Robinhood’s internal policy prohibited members of the group from trading on Robinhood or other platforms during the 24 hours before and after a listing or delisting announcement.
Prosecutors allege Chai nevertheless traded ahead of at least 10 listing announcements. The tokens identified in the complaint include Cat in a dogs world (MEW), Moo Deng (MOODENG), Aster (ASTER), Plasma (XPL), Hyperliquid (HYPE), Ethena (ENA) and Aerodrome Finance (AERO).
Xiang allegedly began trading Popcat (POPCAT) perpetual contracts in March 2025 and subsequently traded ahead of at least 10 additional Robinhood listing announcements.
Hyperliquid Perpetuals Extend Insider-Trading Concerns
The allegations are notable because the trades were not necessarily executed through Robinhood itself. Prosecutors allege the former employees used Hyperliquid’s perpetual contracts to position themselves ahead of announcements made by their former employer.
Perpetual contracts allow traders to take leveraged long or short exposure to an asset without directly holding the underlying token. In this case, prosecutors allege the defendants used those instruments to benefit from anticipated price movements following Robinhood listings.
The structure expands the potential scope of insider-trading enforcement beyond direct purchases of newly listed tokens.
The case also echoes the 2023 Coinbase insider-trading prosecution, in which a former employee was accused of using confidential listing information to profit from token purchases. The Robinhood allegations similarly center on advance knowledge of listings, but involve derivative positions on a decentralized trading venue.
Prosecutors Warn Against Using Alternative Trading Routes
US Attorney Jamie McDonald said corporate insiders cannot avoid commodities or securities laws by using instruments such as perpetual futures or other financial products to trade on misappropriated information.
The charges against each defendant include one count of violating the Commodity Exchange Act and one count of wire fraud. The Commodity Exchange Act charge carries a maximum potential prison sentence of 10 years, while the wire fraud charge carries a maximum of 20 years.
The charges represent allegations rather than findings of guilt. Chai and Xiang are presumed innocent unless convicted.
Outlook
The case puts the intersection of employee confidentiality, cryptocurrency listings and decentralized derivatives markets under greater legal scrutiny. As digital-asset platforms increasingly list tokens across spot and derivatives markets, the prosecution could become a reference point for how US authorities approach trading based on confidential listing information outside the platform where that information originated.
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