Robinhood engineers face up to 30 years over $50,000 alleged Hyperliquid profits

Two Robinhood engineers have been charged with utilizing confidential token-listing info to place worthwhile crypto derivatives trades on Hyperliquid.

On Sept. 15, the Federal prosecutors accused Hefu Chai and Huaisong “Jerry” Xiang of buying and selling perpetual futures tied to tokens they allegedly knew Robinhood Crypto deliberate to record, incomes greater than $50,000 every.

These costs lengthen insider-information enforcement into part of crypto markets the place confidential info held at one firm might be monetized by derivatives traded on a separate decentralized platform.

Both males face one depend of commodities fraud and one depend of wire fraud. The costs carry statutory most sentences of 10 years and 20 years, respectively.

Chai labored at Robinhood from about 2021 till May 2026 and served as a technical lead concerned in new digital-asset listings, prosecutors mentioned. Xiang labored as a software program engineer from about 2024 by September 2026.

Their positions allegedly gave them entry to a non-public Slack channel containing upcoming itemizing plans. Both have been designated “Coin Aware Individuals,” workers permitted to obtain details about whether or not and when Robinhood Crypto would make new tokens out there.

Robinhood’s insurance policies barred these workers from buying and selling whereas holding materials nonpublic info and restricted them from buying and selling affected belongings on any platform earlier than an announcement and for twenty-four hours afterward.

US Attorney Jamie McDonald mentioned:

“Misappropriating confidential info to commerce within the derivatives markets for private profit is illegitimate. Today’s costs clarify that company insiders can not evade the securities and commodities legal guidelines by buying and selling primarily based on misappropriated info in derivatives like perpetual futures, tokenized securities, or different comparable monetary devices.”

Prosecutors mentioned Chai traded on not less than 10 events between 2025 and January 2026. Xiang allegedly traded round a March 2025 POPCAT itemizing and on not less than 10 different events by February 2026.

Prosecutors concentrate on the window earlier than (*30*) public bulletins

The authorities’s case facilities on the hole between when a token grew to become tradable on Robinhood and when the corporate publicly introduced the itemizing.

Robinhood tokens might start buying and selling as a lot as an hour earlier than an announcement, prosecutors mentioned, making a window by which workers with advance data might doubtlessly exit positions earlier than the broader market obtained the information.

In one instance, Xiang allegedly realized round Jan. 23, 2026, that Robinhood deliberate to record RENDER on Jan. 29. Prosecutors mentioned he opened lengthy RENDER perpetual-futures positions across the itemizing date and closed them at a revenue after the token grew to become out there on Robinhood however earlier than the general public announcement.

Chai allegedly used an identical technique involving HYPE. Prosecutors mentioned he realized round Oct. 16, 2025, that Robinhood deliberate to record the token the next week, then opened HYPE perpetual positions round Oct. 23 and exited profitably after buying and selling started on Robinhood however earlier than the announcement.

Those trades have been positioned on Hyperliquid, a decentralized derivatives venue the place perpetual futures permit merchants to speculate on token costs with out holding the underlying belongings.

The case now places the alleged use of confidential itemizing info in decentralized derivatives markets earlier than a federal court docket, doubtlessly testing how prosecutors apply commodities-fraud statutes when the data supply and buying and selling venue are separate.

Robinhood cooperated with the investigation, the Justice Department mentioned. The firm may additionally face stress to reassess the way it segments itemizing info internally and screens worker buying and selling restrictions throughout exterior crypto venues as prosecutors pursue the case.

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