- Prosecutors allege each engineer earned more than $50,000 using confidential listing information.
- The alleged trades involved Hyperliquid perpetual futures before Robinhood announced token listings.
- Both defendants face commodities and wire fraud charges; the allegations remain unproven.
Two Robinhood engineers face federal fraud charges over allegedly trading on confidential cryptocurrency listing information. Prosecutors say Hefu Chai and Huaisong Xiang used Hyperliquid to position themselves before their employer announced new tokens. Each allegedly earned more than $50,000 during the scheme, which authorities say operated between 2025 and 2026.
Robinhood Engineers Accused of Using Private Listing Data
Chai, 36, and Xiang, 30, allegedly accessed information about tokens scheduled for listing on Robinhood Crypto. They then bought perpetual futures tied to those assets before public announcements, according to the Justice Department’s statement.
The alleged strategy sought to profit from price movements following listing news. Such announcements can attract buyers, although they do not guarantee gains.
Prosecutors charged the Robinhood engineers with one Commodity Exchange Act violation and one wire fraud count each. The respective statutory maximum penalties are 10 and 20 years in prison.
Those maximums are not sentences imposed. Both defendants are presumed innocent unless proven guilty.
Perpetual Futures Trades Bring Derivatives Into Focus
The case against the Robinhood engineers centres on derivatives rather than direct purchases of the underlying cryptocurrencies. Perpetual futures provide price exposure without a scheduled expiration date, and leveraged positions can face liquidation.
U.S. Attorney Jamie McDonald said using misappropriated corporate information for personal derivatives trading violates the law. His statement stressed that trading through different financial instruments does not remove potential liability.
The charges follow an earlier federal case involving confidential Coinbase listing information. In 2022, prosecutors brought charges over a scheme involving advance knowledge of tokens scheduled for that exchange.
The Robinhood engineers allegedly used that information advantage through futures positions on another platform. The supplied reports identify them as Robinhood employees and do not allege participation by Hyperliquid staff.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
