Two Robinhood engineers have been charged with using confidential token-listing information to make profitable crypto derivatives trades on Hyperliquid. 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, resulting in each of them earning more than $50,000.
These charges mark a new development in insider-information enforcement within the crypto markets, where confidential information from one company can be exploited through derivatives trading on a separate decentralized platform. Both Chai and Xiang face one count of commodities fraud and one count of wire fraud, with potential maximum sentences of 10 years and 20 years, respectively.
Chai, who worked at Robinhood from around 2021 to May 2026, was a technical lead involved in new digital-asset listings. Xiang, on the other hand, worked as a software engineer from about 2024 to September 2026. Their roles gave them access to a private Slack channel containing upcoming listing plans. Both were designated as “Coin Aware Individuals,” allowing them to receive information about new token availability at Robinhood Crypto.
Despite Robinhood’s policies prohibiting employees from trading while in possession of material nonpublic information, as well as restricting them from trading affected assets on any platform before and after an announcement, prosecutors allege that Chai and Xiang engaged in illicit trading activities.
US Attorney Jamie McDonald stated that misappropriating confidential information for personal gain in the derivatives markets is illegal and emphasized that corporate insiders cannot evade securities and commodities laws by trading based on misappropriated information.
The government’s case focuses on the period between when a token became tradable on Robinhood and when the company publicly announced the listing. Prosecutors noted that tokens could be traded on Robinhood up to an hour before the official announcement, creating a window for employees with advance knowledge to potentially exit positions before the news became public.
Chai and Xiang allegedly used this window to their advantage, making profitable trades on Hyperliquid, a decentralized derivatives platform. The case brings to light the use of confidential listing information in decentralized derivatives markets, raising questions about how commodities-fraud statutes apply when the information source and trading venue are separate.
Robinhood has cooperated with the investigation, and the Justice Department stated that the company may need to reassess how it handles listing information internally and monitors employee trading restrictions across external crypto platforms as the case unfolds.