The U.S. Attorney's Office for the Southern District of New York charged former Robinhood engineers Hefu Chai and Huaisong “Jerry” Xiang with commodities and wire fraud. Prosecutors allege the pair used confidential information regarding upcoming cryptocurrency listings to execute profitable trades.
Chai and Xiang allegedly purchased perpetual futures on the decentralized exchange Hyperliquid between 2025 and 2026. This strategy allowed them to capitalize on price surges following public listing announcements. Each engineer reportedly generated over $50,000 in profit from the scheme.
Robinhood reported the matter to law enforcement following an internal investigation and is now cooperating with the Department of Justice. The company maintains a zero-tolerance policy for insider trading. This case highlights increased regulatory scrutiny of digital asset derivatives.