Prosecutors say Hefu Chai and Huaisong Xiang used confidential Robinhood Crypto listings to trade perpetual futures on Hyperliquid. Each is alleged to have made more than $50,000.
On 15 September 2026, the U.S. Attorney for the Southern District of New York unsealed complaints against two Robinhood engineers, Hefu Chai and Huaisong “Jerry” Xiang. Each is charged with commodities fraud and wire fraud. Prosecutors say they used confidential information about upcoming Robinhood Crypto listings to buy perpetual futures on Hyperliquid, a venue Robinhood does not operate, before the public announcements.
The complaints are accusations. Both men are presumed innocent.
Robinhood Crypto listings and the Coin Aware rule
Chai, 36, of Menlo Park, and Xiang, 30, of Jersey City, worked as engineers at Robinhood. Their jobs gave them sight of whether and when Robinhood Crypto would add a token to the platform.
Robinhood had placed them in a restricted group it called Coin Aware Individuals. Coin Aware staff were not to trade the relevant crypto-asset on Robinhood, or on another platform, before a listing or delisting announcement, or in the 24 hours after it. The code of conduct extends the same idea to cryptocurrency and derivatives. Prosecutors say the listing plans sat in a private Slack channel. The blackout already covered other platforms. The complaint is that the trades happened anyway.
How the Hyperliquid trades are alleged to have worked
They did not need to own the tokens. They bought perpetual futures: contracts that follow the price of an asset, do not expire, and can be closed when the trader chooses. Prosecutors say the pair opened those positions before Robinhood told the public it would list the underlying tokens, then closed the positions after Robinhood’s listings became public.
U.S. Attorney Jamie McDonald said: “Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. That is exactly what we allege Hefu Chai and Huaisong Xiang have done.” He added that corporate insiders cannot step around the securities and commodities laws by using “derivatives like perpetual futures, tokenized securities, or other similar financial instruments.”
Robinhood reported the trades to prosecutors
McDonald thanked Robinhood for cooperating. The company said it investigated, took the matter to law enforcement and regulators, and has no tolerance for insider trading.
Chai is due to appear in the Northern District of California. Xiang is due before Magistrate Judge Ona T. Wang in Manhattan. Each count under the Commodity Exchange Act carries up to 10 years. Wire fraud carries up to 20. The FBI’s New York office worked on the case with the Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Alexandra N. Rothman is prosecuting.
The trades sat off Robinhood’s books
The alleged profits were modest. The filing was not.
The alleged edge was not a unique view of the tokens. It was advance knowledge that a large retail platform was about to put them in front of millions of customers. The contracts were chosen, prosecutors say, because they sat on Hyperliquid, not on Robinhood.
Author: Andy Samu
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organisations have been adversely affected or offered any sort of financial advice in this article. The charges in the complaints are accusations. The defendants are presumed innocent unless and until proven guilty.
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