Robinhood Ex-Engineers Charged with Crypto Derivatives Fraud
Two former engineers at Robinhood Crypto have been charged by US authorities for allegedly misusing secret company information to trade cryptocurrency derivatives. Hefu Chai and Huaisong Xiang accessed nonpublic details about which tokens Robinhood Crypto planned to list between 2025 and 2026, then bought perpetual futures on the decentralized exchange Hyperliquid before those listings became public.
Prosecutors allege that the defendants breached their confidentiality duties owed to their employer while trading. Each defendant profited more than $50,000 from the trades.
The US Department of Justice says that misusing confidential information to trade in derivatives markets for personal benefit is illegal. 'Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal,' said US Attorney Jamie McDonald. 'That is exactly what we allege Hefu Chai and Huaisong Xiang have done.'
The men face one count each of violating the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison, and wire fraud, which carries a maximum sentence of 20 years in prison.