Robinhood Engineers Indicted Over Alleged Crypto Insider Trades

Hefu Chai, 36, and Huaisong Xiang, 30, were charged Tuesday in federal court in Manhattan with fraud. Federal prosecutors allege the two Robinhood software engineers bought perpetual futures on Hyperliquid using advance knowledge of tokens Robinhood Crypto planned to list.

The U.S. Attorney’s Office for the Southern District of New York says the trades occurred between 2025 and 2026. Each man faces one count under the Commodity Exchange Act and one count of wire fraud, and prosecutors say each earned more than $50,000 from the trades.

Perpetual futures are derivatives that let traders take leveraged positions without an expiration date. Traders who expect a token’s price to rise after a broker lists it can hold those positions and sell into the post-listing price increase to realize gains.

The indictment says the engineers used confidential information about upcoming listings to buy futures contracts on Hyperliquid before Robinhood announced the tokens. The case was brought by the U.S. Attorney’s Office in Manhattan. “Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal,” U.S. Attorney Jamie McDonald said in a statement.

Hyperliquid, which operates a decentralized exchange focused on perpetual futures, faced earlier insider trading allegations in December 2025 when traders flagged a wallet shorting HYPE during a token unlock. The exchange said the wallet belonged to a former employee dismissed in early 2024 and that current staff are barred from trading HYPE derivatives.

The HYPE token traded near $77 on Tuesday, down about 4.5% over 24 hours, and was ranked about 11th by market value at roughly $17.1 billion. The case comes while Robinhood expands its crypto offerings, including work on its own blockchain, plans to offer perpetual futures in Europe and tokenized stock trading. Robinhood has not issued a public response to the charges.