Robinhood Engineers Charged with Fraud in Crypto Trading Scheme

US authorities have charged two former Robinhood engineers, Hefu Chai and Huaisong 'Jerry' Xiang, with fraud allegations related to cryptocurrency token listings. The US Department of Justice (DOJ) accuses them of using confidential internal information to profit from perpetual futures trades on Hyperliquid.

According to the DOJ, Chai and Xiang accessed nonpublic listing plans via a private Slack channel and traded perpetual futures on Hyperliquid ahead of announcements. Prosecutors say they earned more than $50,000 each from the trades between 2025 and 2026.

The charges extend insider-trading-style conduct into decentralized derivatives markets, rather than spot token purchases alone. The DOJ argues that company 'insider' restrictions do not prevent liability if misappropriated information is used to trade derivatives.