Federal prosecutors in Manhattan on Sept. 15 charged former Robinhood engineers Hefu Chai and Huaisong “Jerry” Xiang with commodities fraud and wire fraud, alleging they traded crypto perpetual futures on Hyperliquid using confidential information about upcoming Robinhood token listings. The U.S. Attorney’s Office for the Southern District of New York said each defendant allegedly made more than $50,000; the charges carry maximum penalties of 10 years for commodities fraud and 20 years for wire fraud.
The allegations are contained in criminal complaints, and Chai and Xiang are presumed innocent unless proven guilty in court.
SDNY charges against Hefu Chai and Huaisong Xiang
The futures trades were allegedly executed on Hyperliquid, a decentralized derivatives venue, rather than on Robinhood itself. The case nevertheless concerns information the defendants allegedly obtained through their work at the online brokerage.
According to the Justice Department, the alleged conduct occurred between 2025 and 2026. Prosecutors allege Hefu Chai and Huaisong Xiang bought perpetual futures tied to tokens before Robinhood publicly announced listings for those assets and positioned themselves ahead of announcements they expected would move the relevant tokens.
The accusations are set out in criminal complaints, and both men are presumed innocent unless proven guilty in court.
Alleged trades in Hyperliquid perpetual futures
The futures trades were allegedly executed on Hyperliquid, a decentralized derivatives venue. That detail distinguishes the accusations from a case focused solely on transactions through the employer’s own platform: the government alleges confidential Robinhood information was used to trade elsewhere.
CoinDesk described the prosecution as extending crypto listing-front-running enforcement into decentralized derivatives markets, given that the alleged positions were in Hyperliquid perpetual futures rather than spot purchases directly on Robinhood. The DOJ did not specify in its announcement the full trading results for each individual position, but said each defendant earned more than $50,000 overall from the alleged scheme.
Robinhood’s restricted listing channel and trading blackout
According to the criminal complaint filed in the Southern District of New York, Chai allegedly had access to a restricted Robinhood Slack channel called “Coin Aware Individuals,” and prosecutors allege he traded ahead of at least 10 listings: MEW, MOODENG, ASTER, XPL, HYPE, ENA, AERO, SYRUP, LDO, DOT and LIT. Robinhood’s insider-trading policy allegedly barred designated employees from trading the relevant crypto-assets, on Robinhood or elsewhere, before a listing announcement and for 24 hours afterward. The complaints present the policy as part of the alleged breach of confidentiality surrounding Robinhood’s listing process.
