Robinhood Engineers Charged with Insider Trading on Hyperliquid Futures

Two software engineers at Robinhood Markets allegedly tapped confidential information about upcoming cryptocurrency listings to place profitable bets on a decentralized derivatives exchange, according to federal prosecutors. Hefu Chai, 36, and Huaisong 'Jerry' Xiang, 30, each face one count of commodities fraud and one count of wire fraud, the U.S. Attorney's Office for the Southern District of New York announced Monday.

The alleged scheme netted each defendant more than $50,000, as they profited from price swings that followed public listing announcements on Robinhood Crypto, the company's digital asset trading arm. Prosecutors say Chai and Xiang used nonpublic details about which tokens were set to be listed, and when, to buy perpetual futures in the relevant tokens before the announcements became public.

The case tests how insider-trading laws apply to digital asset markets, and highlights the regulatory gray zone surrounding decentralized exchanges. If convicted, Chai and Xiang could face up to 10 years in prison for commodities fraud and up to 20 years for wire fraud.