The U.S. Department of Justice (DOJ) has revealed that two engineers at Robinhood Markets are facing charges for allegedly leveraging the company’s confidential information to engage in trading activities on Hyperliquid.
As stated by the Southern District of New York Attorney’s Office, Hefu Chai and Huaisong Xiang, referred to as “Jerry Xiang,” have been charged with commodities fraud and electronic communications fraud. The allegations suggest that they took advantage of privileged information belonging to Robinhood for their personal benefit.
The indictment details that Chai and Xiang, because of their positions at Robinhood, had access to undisclosed information regarding upcoming listings of cryptocurrencies on the company’s platform, Robinhood Crypto, including timing details.
Prosecutors highlight that the engineers initiated positions in perpetual futures on those tokens through the decentralized derivatives platform Hyperliquid between 2025 and 2026, preceding Robinhood’s public announcements about its cryptocurrency listings.
Per the DOJ, the pair allegedly exploited price changes that followed the company’s public listing decisions, each accruing more than $50,000 in illegal profits from these trades.
Jamie McDonald, the U.S. Attorney for the Southern District of New York, emphasized that the misuse of confidential corporate data for personal gain in derivative markets constitutes a crime. He reiterated that insiders cannot bypass capital market regulations by using instruments like perpetual futures or tokenized securities.
James C. Barnacle Jr., Deputy Director of the FBI’s New York Office, remarked that the accused reportedly exploited sensitive information acquired from their employer for personal gain, affirming the FBI’s commitment to tackling similar misconduct.
*This information should not be considered investment advice.