Federal prosecutors said Tuesday that two Robinhood engineers used confidential information about upcoming cryptocurrency listings to place profitable trades on Hyperliquid before those listings were announced.
Hefu Chai, 36, and Huaisong "Jerry" Xiang, 30, were each charged with one count of commodities fraud and one count of wire fraud.
In a statement, U.S. Attorney Jamie McDonald said: "Today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments."
Prosecutors say the trades used nonpublic Robinhood listing information
According to the Department of Justice, the two engineers used nonpublic information about upcoming Robinhood Crypto token listings to buy related perpetual futures before the public announcements. Prosecutors said the trades were made "for their own benefit" between 2025 and 2026.
The Justice Department said each defendant earned more than $50,000 from the alleged scheme.
Perpetual futures, often called perps, let traders speculate on an asset’s price without owning the asset itself. They often include leverage, and unlike traditional futures, they do not expire.
Hyperliquid named as the trading venue
Federal prosecutors said the trades took place on Hyperliquid, one of the largest decentralized platforms for perpetual futures trading. The platform has also faced increased regulatory scrutiny.
Case proceeds under commodities law
In the Robinhood case, prosecutors are using the Commodity Exchange Act to pursue the alleged insider trading involving derivatives rather than filing securities fraud charges.
The report also pointed to an earlier federal case involving former Coinbase product manager Ishan Wahi, who was accused of sharing confidential token-listing information with his brother and a friend. Wahi later pleaded guilty to wire fraud conspiracy.
Robinhood cooperated, prosecutors say
Prosecutors said Robinhood, which has expanded its crypto perpetual-futures business, cooperated with the investigation.
If convicted, the commodities fraud charge carries a maximum prison sentence of 10 years. The wire fraud charge carries a maximum of 20 years.
