TLDR
- The DOJ charged Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud
- Both allegedly used confidential Slack channel data about upcoming Robinhood crypto listings
- They traded perpetual futures on Hyperliquid ahead of at least 10 listing announcements each
- Each allegedly profited more than $50,000 between 2025 and 2026
- Each faces up to 10 years for the Commodity Exchange Act violation and 20 years for wire fraud
Two former Robinhood engineers have been charged by the US Department of Justice for allegedly using inside information to trade crypto perpetual futures ahead of platform listings.
🚨BREAKING: Two Robinhood engineers have been charged with fraud over alleged insider trading on Hyperliquid.
Prosecutors say Hefu Chai and Huaisong Xiang used confidential information about upcoming Robinhood crypto listings to trade perpetual futures before the announcements.… pic.twitter.com/cMZicm41at
— Coin Bureau (@coinbureau) September 15, 2026
The DOJ charged Hefu Chai, 36, and Huaisong Xiang, 30, with commodities fraud and wire fraud. Both worked in roles that gave them access to confidential listing information.
Chai worked at Robinhood from around 2021 until May 2026 as a technical lead for digital-asset listings. Xiang worked there from around 2024 until September 2026 as a software engineer in crypto listings.
How the Alleged Scheme Worked
Robinhood gave both engineers “Coin Aware” status, granting them access to a private Slack channel with planned listing dates and details.
Company policy banned these employees from trading on any platform 24 hours before or after a listing announcement. Prosecutors say both men ignored that rule.
They allegedly bought perpetual contracts on Hyperliquid tied to tokens before Robinhood made public announcements. Once the listings went live and prices moved up, they closed their positions for a profit.
Chai allegedly traded ahead of at least 10 listing announcements. Tokens involved included Cat in a Dogs World, Moo Deng, Aster, Plasma, Hyperliquid, Ethena, and Aerodrome Finance.
Xiang allegedly started with Popcat perpetuals in March 2025, then traded ahead of at least 10 other announcements.
Each defendant allegedly made more than $50,000 from the trades.
Legal Consequences and Precedent
US Attorney Jamie McDonald stated that corporate insiders cannot avoid commodities and securities laws by routing trades through perpetual futures or similar instruments.
Each charge under the Commodity Exchange Act carries a maximum of 10 years in prison. The wire fraud count carries a maximum of 20 years.
Robinhood said it has zero tolerance for insider trading. The company stated it investigated the matter immediately and reported it to law enforcement and regulators.
This case follows a 2022 DOJ action involving Coinbase, which was described as the first cryptocurrency insider-trading tipping scheme. In that case, individuals traded the underlying tokens directly rather than derivatives.
The Robinhood case extends the legal issue into decentralized derivative markets, which prosecutors say offers no protection from the law.
Both defendants are presumed innocent unless convicted.
The charges mark one of the clearest examples yet of the DOJ applying traditional commodities law to decentralized crypto trading platforms.
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