Federal prosecutors have charged two Robinhood engineers, 36-year-old Hefu Chai and 30-year-old Huaisong Xiang, with commodities and wire fraud. The employees allegedly utilized nonpublic information regarding upcoming cryptocurrency listings on the Robinhood platform to execute profitable trades.
The defendants reportedly traded perpetual futures on the decentralized exchange Hyperliquid between 2025 and 2026. By purchasing these derivatives before official announcements, each individual allegedly generated profits exceeding $50 000. The Department of Justice noted that Robinhood cooperated with the investigation.
The charges are brought under the Commodity Exchange Act, focusing on insider trading involving derivatives. If convicted, the defendants face a maximum prison sentence of 10 years for commodities fraud and up to 20 years for wire fraud. This case follows previous legal actions against industry insiders for similar activities.
