Robinhood Engineers Charged with Insider Trading on Hyperliquid
Two engineers at Robinhood Markets have been charged with using confidential information to trade on Hyperliquid. Hefu Chai and Huaisong Xiang, also known as Jerry Xiang, allegedly obtained over $50,000 in profits by trading perpetual futures contracts tied to specific tokens before their addition was publicly announced. The U.S. Attorney's Office for the Southern District of New York (SDNY) filed charges against the pair under the Commodity Exchange Act and wire fraud laws.
The defendants had access to internal digital asset listing calendars at Robinhood Crypto, allowing them to breach their duty of confidentiality. According to court filings, they purchased perpetual futures contracts on Hyperliquid between 2025 and 2026, using information that was not publicly available. The SDNY's Securities and Commodities Fraud Task Force is handling the case under the supervision of Assistant U.S. Attorney Alexandra N. Rothman.
The investigation was aided by the transparency of Hyperliquid's blockchain, which allowed independent analysts to detect suspicious activity months before charges were filed. The on-chain traces revealed a cluster of wallets that opened positions shortly before each listing announcement, including one linked to a short position opened hours before Robinhood published its first-quarter 2026 earnings.
The SDNY is framing the case under the misappropriation theory, which holds that confidentiality does not disappear simply because the order was executed on an on-chain protocol. Both defendants are presumed innocent until proven guilty, and face up to 30 years in prison if convicted.