- U.S. prosecutors charged Robinhood engineers Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud for allegedly trading perpetual futures using confidential company information.
- Prosecutors allege the engineers traded crypto-linked perpetuals on Hyperliquid before Robinhood publicly announced that the underlying tokens would be listed on Robinhood Crypto.
- Chai and Xiang each allegedly made more than $50,000, while the charges carry maximum potential sentences of 10 years for commodities fraud and 20 years for wire fraud.
Two Robinhood engineers have been charged with allegedly using confidential company information to trade cryptocurrency perpetual futures on Hyperliquid.
The U.S. Attorney’s Office for the Southern District of New York unsealed complaints against Hefu Chai and Huaisong Xiang, also known as “Jerry Xiang,” accusing them of commodities fraud and wire fraud.
According to prosecutors, both engineers had access through their jobs to nonpublic information about whether and when Robinhood Crypto planned to support additional cryptocurrencies.
Authorities allege they used that information to place trades before Robinhood publicly announced new token listings.
Engineers Allegedly Traded Ahead of Robinhood Listings
Between 2025 and 2026, Chai and Xiang allegedly purchased perpetual futures on Hyperliquid tied to cryptocurrencies that Robinhood was preparing to list.
Prosecutors said the engineers possessed material nonpublic information about those listings at the time of the trades.
The complaints allege they repeatedly entered positions before Robinhood publicly announced support for the underlying cryptocurrencies.
According to authorities, both Chai and Xiang made more than $50,000 from the alleged trading scheme.
Prosecutors claim the activity violated their duties to Robinhood to keep the information confidential.
Hyperliquid Perpetual Futures Become Focus of Case
Hyperliquid is a decentralized derivatives exchange where traders can take positions through products including perpetual futures.
Unlike traditional futures, perpetuals do not have an expiration date. They allow traders to speculate on movements in an underlying asset without owning that asset directly.
U.S. Attorney Jamie McDonald said the case demonstrates that corporate insiders cannot avoid securities and commodities laws by using confidential information to trade instruments such as perpetual futures or tokenized securities.
Robinhood cooperated with the investigation, according to the U.S. Attorney’s Office.
Charges Carry Up to 20 Years in Prison
Chai, 36, of Menlo Park, California, and Xiang, 30, of Jersey City, New Jersey, were each charged with one count of violating the Commodity Exchange Act and one count of wire fraud.
The Commodity Exchange Act charge carries a maximum potential sentence of 10 years in prison, while wire fraud carries a maximum of 20 years.
The investigation was conducted by the FBI, with the Southern District of New York’s Securities and Commodities Fraud Task Force handling the prosecution.
The charges are accusations, and both defendants are presumed innocent unless and until proven guilty.
