Two Robinhood engineers charged with insider trading

US prosecutors have charged two Robinhood software developers with insider trading. Hefu Chai and Huaisong Xiang allegedly used confidential information about upcoming crypto listings at Robinhood to open positions on the decentralised derivatives platform Hyperliquid before those listings were made public. Both allegedly made more than $50.000 in profit from this.

In brief:

• Chai and Xiang are accused of commodities fraud and wire fraud in connection with trading based on non-public company information.
• They allegedly carried out the practice repeatedly between 2025 and 2026 via perpetual futures on Hyperliquid.
• Each defendant faces up to 10 years in prison for the commodities offences and 20 years for wire fraud.

Trading via Hyperliquid based on non-public listings

The charges come from the office of the US Attorney for the Southern District of New York, together with the FBI. According to prosecutors, Chai and Xiang, as engineers at Robinhood, had access to confidential information about which cryptocurrencies the platform would soon list. They used that information to take positions in advance via perpetual futures on Hyperliquid, a decentralised derivatives exchange.

The practice was repeated several times between 2025 and 2026. Each defendant allegedly made an illegal profit of more than $50.000, prosecutors said.

Severe penalties possible for both defendants

Chai and Xiang are each charged with one violation of the Commodity Exchange Act, which carries a maximum prison sentence of 10 years, and one count of wire fraud, which carries a maximum prison sentence of 20 years. Chai will be arraigned in the Northern District of California, while Xiang will appear before a federal judge in New York.

The case again illustrates how insider trading around crypto listings can also take place on decentralised platforms and is increasingly coming under the scrutiny of US authorities. The price of Hyperliquid stands at $77.28 at the time of publication, down 2.4% in the past 24 hours.