Federal prosecutors have charged two former Robinhood engineers with allegedly using confidential cryptocurrency listing information to trade perpetual futures on Hyperliquid. Hefu Chai, 36, and Huaisong “Jerry” Xiang, 30, face commodities fraud and wire fraud charges tied to trades allegedly made before Robinhood Crypto publicly announced new token listings.
According to the U.S. Attorney’s Office for the Southern District of New York, prosecutors allege that Chai and Xiang repeatedly purchased perpetual futures linked to cryptocurrencies they knew Robinhood planned to support between 2025 and 2026. Each allegedly generated more than $50,000 in profits from the trades.
Prosecutors Target Pre-Listing Hyperliquid Trades
Both engineers had access through their roles to nonpublic information concerning whether and when Robinhood Crypto would support additional cryptocurrencies. The government alleges they traded on that information in breach of duties to keep Robinhood’s listing decisions confidential, opening Hyperliquid positions before the corresponding public announcements.
Hyperliquid’s perpetual contracts allow traders to take positions on an underlying asset without owning it and without a conventional futures expiration date. The case shows prosecutors applying commodities and wire-fraud statutes to alleged misuse of corporate information through decentralized derivatives markets, extending the legal issue beyond direct purchases of the tokens being listed.
That distinction is relevant as Hyperliquid grows beyond conventional crypto perpetuals into markets where funding rates and liquidity can vary substantially. The charges concern the defendants’ alleged misuse of confidential information, not a claim that Hyperliquid itself participated in the scheme.
Robinhood Says It Reported the Activity
Robinhood said it has robust insider-trading policies and “zero tolerance” for the conduct alleged in the complaints. The company said it investigated the matter and reported it to law enforcement and regulators, while continuing to cooperate with the investigation.
The case adds a different type of internal-control risk for Robinhood after earlier operational incidents, including the compromise of CEO Vlad Tenev’s X account in a fraudulent token promotion. Here, however, prosecutors allege misuse of legitimate employee access rather than an external compromise of Robinhood’s systems.
Chai is charged with one Commodity Exchange Act violation carrying a maximum sentence of 10 years and one wire-fraud count carrying a maximum of 20 years; Xiang faces the same charges. The complaints remain allegations, and both defendants are presumed innocent unless and until proven guilty. Actual sentences, if there are convictions, would be determined by the court.
The immediate next stage is the federal criminal process surrounding the two complaints. The case could provide an important test of how prosecutors pursue alleged trading on confidential crypto-listing information when the transactions occur through perpetual derivatives rather than the underlying spot assets.