US federal prosecutors on Tuesday charged two former Robinhood engineers with commodities fraud and wire fraud, alleging that they misused confidential information about upcoming cryptocurrency listings to profit from perpetual futures trades on the decentralized exchange Hyperliquid. Perpetual futures are derivative contracts with no expiration date that allow traders to take leveraged long or short positions on an asset's price direction.

According to the US Department of Justice (DOJ), Hefu Chai and Huaisong “Jerry” Xiang purchased perpetual contracts tied to tokens ahead of their Robinhood Crypto listings. Prosecutors alleged that each man earned more than $50,000 from the trades between 2025 and 2026.

The DOJ said the two men had access to a private company Slack channel containing details of planned listings. They allegedly used that information to open long positions on Hyperliquid, closing them once the tokens' value rose following their debut on Robinhood.

The case has parallels to the 2023 Coinbase insider-trading prosecution, in which a former employee used confidential information to profit from new token listings by buying the underlying assets directly, though the Robinhood case extends the alleged conduct into decentralized derivatives markets.

Cointelegraph contacted Robinhood for comment but did not receive a response by the time of publication.

Robinhood barred trading around listing announcements

According to the DOJ's complaints, Chai worked at Robinhood from around 2021 until May 2026 and served as a technical lead responsible for new digital-asset listings. Xiang joined the company around 2024 and remained there until September 2026 as a software engineer involved in crypto listings.

Robinhood designated both as “Coin Aware Individuals,” a designation that granted them access to a private Slack channel containing planned listing dates, according to the complaints.

Company policy prohibited members of that group from trading — on Robinhood or any other platform — for 24 hours before or after a listing or delisting announcement.

Prosecutors allege that Chai traded perpetuals ahead of at least 10 listing announcements involving 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 first traded Popcat (POPCAT) perpetuals in March 2025 and later traded ahead of at least 10 other listing announcements.

US Attorney Jamie McDonald said corporate insiders cannot evade securities and commodities laws by trading on misappropriated information through perpetual futures, tokenized securities or similar instruments.

Each defendant faces one count of violating the Commodity Exchange Act, which carries a maximum prison sentence of 10 years, and one count of wire fraud, which carries a maximum sentence of 20 years.

The charges against Chai and Xiang remain allegations, and both defendants are presumed innocent unless convicted.