U.S. prosecutors have charged two Robinhood engineers with commodities fraud and wire fraud, alleging that they used confidential information about upcoming crypto listings to trade perpetual futures on Hyperliquid before those listings were made public.

Hefu Chai, 36, of Menlo Park, California, and Huaisong “Jerry” Xiang, 30, of Jersey City, New Jersey, each allegedly earned more than $50,000 from trades carried out across 2025 and 2026. Both men had access to internal information about which assets Robinhood Crypto planned to support and when trading would begin.

Private Slack Channel Carried Listing Dates

Chai worked as a technical lead responsible for new digital-asset listings, while Xiang served as a software engineer on the same process. Both were designated “Coin Aware Individuals,” giving them access to a restricted Slack channel used for listing planning, readiness, and launch information.

Robinhood’s internal policy prohibited employees from trading securities, cryptoassets, event contracts, or other financial instruments while holding material nonpublic information obtained through their work. Coin Aware employees were also barred from trading around listing announcements, including on platforms outside Robinhood.

Prosecutors allege that Chai used confidential listing dates to open long perpetual positions on Hyperliquid in tokens including MEW, MOODENG, ASTER, XPL, HYPE, ENA, AERO, SYRUP, LDO, DOT, and LIT. In several instances, he closed those positions after the assets became tradable on Robinhood but before the company publicly announced the listings.

Hyperliquid is a decentralized exchange specializing in perpetual futures—leveraged derivative contracts that give traders long or short exposure to a token’s price without requiring them to own the underlying asset. Trading on the platform is conducted through crypto wallets rather than brokerage accounts, with activity recorded on-chain under public wallet addresses.

The allegations resemble the earlier Coinbase listing case, in which confidential information about upcoming token additions was used to place trades ahead of public announcements. That case ended with a former Coinbase product manager pleading guilty to wire fraud.

Xiang Allegedly Traded POPCAT Before Robinhood Listing

Xiang allegedly received private Slack messages about Robinhood’s planned POPCAT listing in March 2025, transferred roughly $34,000 in ETH to a Hyperliquid-linked wallet, and opened POPCAT perpetual long positions the following day. He closed the trades after POPCAT became available for trading on Robinhood but before the public listing announcement.

Prosecutors identified at least 10 additional occasions between May 2025 and February 2026 on which the same wallet traded perpetuals ahead of Robinhood listings.

Robinhood Cooperates With Federal Investigation

The FBI carried out the investigation, while the Southern District of New York’s Securities and Commodities Fraud Task Force is leading the prosecution. According to the Justice Department’s announcement, federal prosecutors thanked Robinhood for its cooperation.

The case extends market-integrity enforcement into decentralized perpetual futures, following earlier proceedings involving equities, crypto listings, and prediction markets. A separate insider-trading prosecution earlier this year charged 30 defendants over alleged trades based on confidential merger information.

Chai and Xiang each face one count under the Commodity Exchange Act, carrying a maximum prison sentence of 10 years, and one wire-fraud count, carrying a maximum of 20 years. The charges are allegations, and both defendants are presumed innocent unless proven guilty.