Robinhood Engineer Charged with Federal Fraud for Crypto Trading Scheme

A former engineer at Robinhood, a popular trading platform, has been charged with federal fraud for allegedly using confidential company information to trade cryptocurrencies. Hefu Chai, 36, of Menlo Park, California, was employed as an engineer at Robinhood and had access to nonpublic information about upcoming cryptocurrency listings on the platform.

Prosecutors say Chai used this information to trade perpetual futures tied to cryptocurrencies on Hyperliquid, a decentralized derivatives exchange. According to the criminal complaint, Chai repeatedly purchased the cryptocurrency-linked derivatives before Robinhood publicly announced that the underlying tokens would be available for trading on its Crypto platform between 2025 and 2026.

Chai made more than $50,000 from these trades, and is charged with one count of violating the Commodity Exchange Act and one count of wire fraud. The commodities fraud charge carries a maximum sentence of 10 years in prison, while wire fraud carries a maximum sentence of 20 years.