Robinhood Engineers Charged Over Crypto Listing Insider-Trading Scheme
Two former Robinhood engineers have been charged with fraud by the U.S. Department of Justice for allegedly using nonpublic information related to cryptocurrency listings.
The engineers, who were not named in the report, used Robinhood's crypto listing schedule to buy perpetual futures contracts on decentralized exchange Hyperliquid (HYPE), generating more than $50,000 each in profit.
Prosecutors allege that they had access to token listing information through internal Robinhood channels and used that information to open long positions on Hyperliquid, which they then closed after prices rose following the tokens' listing on Robinhood.
U.S. Attorney Jamie MacDonald said that corporate insiders cannot avoid commodities and securities laws by trading on nonpublic information through instruments such as perpetual futures or tokenized securities.