Two Robinhood engineers charged with commodities and wire fraud for trading crypto on confidential listing information, earning over $50k each via Hyperliquid perpetual futures.
Regulation & Gov ·
Two Robinhood engineers have been charged with commodities and wire fraud after allegedly exploiting confidential company data to trade crypto derivatives. Hefu Chai and Huaisong Xiang accessed non-public information about upcoming token listings scheduled for Robinhood Crypto and, according to the Southern District of New York, used that intelligence to purchase perpetual futures contracts on Hyperliquid before those listings became public. The scheme reportedly operated between 2025 and 2026, with each defendant earning over $50,000. Chai, 36, is based in Menlo Park, California; Xiang, 30, is in Jersey City, New Jersey.
The federal charges carry steep penalties: the commodities fraud count allows up to 10 years imprisonment, while the wire fraud count permits up to 20 years, potentially totaling 30 years combined. US Attorney Jamie McDonald stated that the prosecution demonstrates corporate insiders cannot circumvent securities and commodities laws by trading derivatives or related instruments based on misappropriated information.
The case mirrors earlier allegations against Jane Street Group, which prosecutors accused of accessing Telegram communications with Terraform Labs insiders and selling approximately $192 million in UST before the stablecoin's 2022 collapse. Neither Chai nor Xiang has entered a plea, and proceedings are scheduled in federal courts in Northern California and New York respectively.