U.S. prosecutors charged two Robinhood engineers with commodities fraud and wire fraud for allegedly using confidential crypto-listing information to trade perpetual futures on Hyperliquid before the listings became public.
Hefu Chai, 36, of Menlo Park, California, and Huaisong “Jerry” Xiang, 30, of Jersey City, New Jersey, each earned more than $50,000 from the alleged trades, which took place across 2025 and 2026. Both men had access to internal information on which assets Robinhood Crypto planned to support and when trading would begin.
Private Slack Channel Carried Listing Dates
Chai worked as a technical lead responsible for new digital-asset listings, while Xiang worked as a software engineer on the same process. Both were designated “Coin Aware Individuals” with access to a restricted Slack channel used for listing planning, readiness and launch information.
Robinhood’s internal policy prohibited employees from trading securities, cryptoassets, event contracts or other financial instruments while holding material nonpublic information obtained through their work. Coin Aware employees were also barred from trading around listing announcements, including on platforms outside Robinhood.
Prosecutors allege Chai used confidential listing dates to open long perpetual positions on Hyperliquid for tokens including MEW, MOODENG, ASTER, XPL, HYPE, ENA, AERO, SYRUP, LDO, DOT and LIT. In several cases, he closed positions after the assets became tradable on Robinhood but before the company publicly announced the listings.
The allegations resemble the earlier Coinbase listing case, where confidential information about upcoming token additions was used to place trades before public announcements.
Xiang Allegedly Traded POPCAT Before Robinhood Listing
Xiang allegedly received private Slack messages about Robinhood’s planned POPCAT listing in March 2025, transferred about $34,000 in ETH to a Hyperliquid-linked wallet and opened POPCAT perpetual longs the following day.
He closed the positions after POPCAT became available for trading on Robinhood but before the public listing announcement. Prosecutors identified at least 10 additional occasions between May 2025 and February 2026 where the same wallet traded perpetuals ahead of Robinhood listings.
Robinhood Cooperates With Federal Investigation
The FBI investigated the trading, while the Southern District of New York’s Securities and Commodities Fraud Task Force is handling the prosecution. Federal prosecutors thanked Robinhood for its cooperation with the investigation.
The case extends market-integrity enforcement into decentralized perpetual futures after authorities pursued similar conduct involving equities, crypto listings and prediction markets. A separate insider-trading prosecution earlier this year charged 30 defendants over alleged trades based on confidential merger information.
Chai and Xiang each face one Commodity Exchange Act count carrying a maximum 10-year prison sentence and one wire-fraud count carrying a maximum of 20 years. The charges are allegations, and both defendants are presumed innocent unless proven guilty.
