Two former Robinhood (NASDAQ: HOOD) engineers have been charged in federal court with using confidential company information about upcoming cryptocurrency listings to place trades on a separate derivatives platform, prosecutors said this week.
The US Attorney’s Office for the Southern District of New York (SDNY) unsealed criminal complaints against Hefu Chai, 36, of Menlo Park, California, and Huaisong Xiang, also known as Jerry Xiang, 30, of Jersey City, New Jersey. Each is accused of commodities fraud under the Commodity Exchange Act and of wire fraud.
The commodities count carries a statutory maximum of 10 years in prison; the wire-fraud count carries a maximum of 20 years.
The charges are allegations, and both men are presumed innocent unless proven guilty.
According to the complaints, Chai and Xiang worked as engineers at Robinhood Markets.
Their jobs gave them access to nonpublic details about whether and when Robinhood Crypto, the firm’s digital asset platform, would add new tokens.
Company policy treated employees with that access as “Coin Aware Individuals” and barred them from trading the relevant assets on Robinhood or any other venue before a listing or delisting announcement and for 24 hours afterward.
Prosecutors say the pair used that restricted information anyway.
The alleged scheme did not involve buying the tokens on Robinhood itself.
Instead, between 2025 and 2026, the government says, the engineers repeatedly purchased perpetual futures tied to the soon-to-be-listed coins on Hyperliquid, a decentralized derivatives exchange.
Perpetual futures track an asset’s price without an expiration date.
Traders can keep a position open by paying or receiving periodic funding payments designed to keep the contract aligned with the spot market, and they can close the position at any time to lock in a gain or loss.
Prosecutors contend that a listing on a large retail platform often lifts a token’s price, so a long position opened just before the public announcement can be profitable.
Each defendant is alleged to have made more than $50,000.
US Attorney Jamie McDonald said the case is meant to show that insiders cannot sidestep commodities and securities rules by moving the trade into derivatives such as perpetual futures.
“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal,” McDonald said.
The FBI’s New York field office joined the announcement.
Robinhood said it has a zero-tolerance policy for insider trading, investigated as soon as it learned of the conduct, reported the matter to authorities, and continues to cooperate.
The complaints describe a pattern rather than a single trade.
Reporting on the filings indicates Chai’s alleged positions included contracts tied to tokens such as Moo Deng, Cat in a Dogs World, Aster, Plasma, Hyperliquid’s own token, Ethena, and Aerodrome Finance, among others. Xiang was also a software engineer involved in listing work.
Prosecutors say both men had access to an internal channel that circulated planned listing dates.
The case sits in a broader enforcement trend.
Authorities have previously pursued people who used advance knowledge of exchange listings, including a former Coinbase product manager who pleaded guilty in a related theory of the law.
Here, prosecutors relied on the Commodity Exchange Act because the trades were in perpetual futures rather than in the tokens as securities.
That choice underscores how US agencies are treating crypto derivatives as commodities instruments even when they trade on decentralized venues outside traditional brokerages.
The dollar amounts alleged are modest next to some historic insider-trading cases, but the legal theory is significant for crypto markets.
Listing calendars are among the most closely guarded pieces of information at retail platforms, because a well-timed announcement can move thin token markets. If the government prevails, employees with listing access will face a clearer warning that trading the economic equivalent of those tokens on another venue is still off-limits.