Two Robinhood Engineers Charged with Insider Trading on Hyperliquid

Two Robinhood engineers allegedly used confidential information about upcoming cryptocurrency listings to make profitable trades on decentralized exchange Hyperliquid, federal prosecutors said Tuesday.

Hefu Chai, 36, and Huaisong “Jerry” Xiang, 30, each face one count of commodities fraud and one count of wire fraud.

“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,” U.S. Attorney Jamie McDonald said in a statement.

Perpetual futures, or “perps,” let traders speculate on an asset’s price—often with leverage—without owning it. Unlike conventional futures, the derivatives do not expire. Hyperliquid is one of the largest decentralized platforms for trading perps and has faced increased regulatory scrutiny.

According to the DOJ, the engineers allegedly used nonpublic information about upcoming Robinhood Crypto token listings to buy related perpetual futures before the announcements, earning profits “for their own benefit” between 2025 and 2026. Each defendant earned more than $50,000 from the alleged scheme, the Justice Department said.

Federal authorities previously charged former Coinbase product manager Ishan Wahi over confidential token-listing information he allegedly shared with his brother and a friend. Wahi later pleaded guilty to wire fraud conspiracy.

In the Robinhood case, prosecutors are using the Commodity Exchange Act to pursue alleged insider trading involving derivatives rather than bringing securities fraud charges.

Robinhood, which has expanded its crypto perpetual-futures business, cooperated with the investigation, prosecutors said.

If convicted, the commodities fraud charge carries a maximum prison sentence of 10 years, while wire fraud carries a maximum of 20 years.