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US charges ex-Robinhood engineers over alleged pre-listing crypto trades
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US federal prosecutors on Tuesday charged two former Robinhood engineers with commodities fraud and wire fraud, alleging they used confidential knowledge of upcoming cryptocurrency listings to profit from perpetual futures trades on the decentralized exchange Hyperliquid. The Department of Justice identified the defendants as Hefu Chai and Huaisong "Jerry" Xiang. According to the complaints, each man earned more than $50,000 from the trades executed between 2025 and 2026. Both are presumed innocent unless convicted.
The DOJ alleged that Chai and Xiang had access to a private company Slack channel containing information about planned token listings. Prosecutors claim the pair used that information to open long positions on Hyperliquid perpetual contracts, then closed them once prices rose following each token's debut on Robinhood Crypto. Cointelegraph contacted Robinhood for comment but received no response before publication.
Court filings state that Chai worked at Robinhood from roughly 2021 until May 2026 as a technical lead responsible for new digital-asset listings. Xiang joined around 2024 and worked until September 2026 as a software engineer involved in crypto listings. Robinhood designated both as "Coin Aware Individuals," a group granted access to the private Slack channel detailing planned listing dates.
Company policy prohibited members of that group from trading on Robinhood or any other platform within 24 hours before or after a listing or delisting announcement. Prosecutors allege Chai traded perpetuals ahead of at least 10 announcements, covering tokens including Cat in a dogs world (MEW), Moo Deng (MOODENG), Aster (ASTER), Plasma (XPL), Hyperliquid (HYPE), Ethena (ENA) and Aerodrome Finance (AERO). Xiang allegedly began with Popcat (POPCAT) perpetuals in March 2025 and later traded ahead of at least 10 more listings.
The case echoes the 2023 Coinbase insider-trading prosecution, in which a former employee used confidential listing information to buy underlying tokens directly. The Robinhood matter, however, extends the alleged misconduct into decentralized derivative markets, an area regulators have increasingly scrutinized.
US Attorney Jamie McDonald said corporate insiders cannot evade securities and commodities laws by trading misappropriated information through perpetual futures, tokenized securities or similar instruments. Each defendant faces one count of violating the Commodity Exchange Act, carrying a maximum 10-year prison sentence, and one count of wire fraud, punishable by up to 20 years.
The charges remain allegations, and both defendants are presumed innocent. The outcome could shape how US prosecutors pursue insider-trading claims in decentralized derivatives markets, where surveillance is far weaker than on regulated exchanges. Robinhood has not publicly commented on the matter.
