Robinhood Engineers Charged with Using Confidential Data for Trading Gains
Two former engineers at Robinhood have been charged with federal crimes related to using confidential data about upcoming cryptocurrency listings to conduct trades in perpetual futures on Hyperliquid. Hefu Chai, 36, and Huaisong Xiang, 30, allegedly used nonpublic information about cryptocurrencies that Robinhood planned to add to its platform to make trades before the company publicly announced their releases.
The alleged trades netted each defendant over $50,000, prosecutors say. The engineers reportedly leveraged their holdings in perpetuals, hoping to benefit from movements in the price after Robinhood's statements. This setup provided a way for them to speculate without owning the underlying tokens.
Hyperliquid is a decentralized derivatives exchange that provides perpetual futures related to cryptocurrencies and other assets. These contracts have no traditional expiration date, allowing traders to hold them indefinitely, while payments for funding expenses tend to keep their price in line with the market.