TL;DR:
- Two Robinhood engineers were charged with using confidential information about upcoming token listings to trade on Hyperliquid.
- Hefu Chai and Huaisong Xiang face charges of wire fraud and violation of the Commodity Exchange Act, with penalties of up to 30 years.
- Each defendant allegedly obtained more than $50,000 in profits by trading perpetual futures before the tokens were publicly announced.
The U.S. Attorney’s Office for the Southern District of New York (SDNY) filed criminal charges against two Robinhood Markets engineers accused of trading perpetual futures on Hyperliquid using non-public information about upcoming token additions to the platform.
The defendants are Hefu Chai, 36, a resident of Menlo Park, California, and Huaisong Xiang, 30, also known as Jerry Xiang, a resident of Jersey City, New Jersey.
According to court filings, both engineers had access, by virtue of their roles within the company, to internal digital asset listing calendars at Robinhood Crypto.
Between 2025 and 2026, they allegedly purchased perpetual futures contracts on Hyperliquid tied to specific tokens before the company publicly announced their addition, breaching the duty of confidentiality they owed to their employer. The prosecution did not identify the tokens involved in its statement, nor did it publicly associate wallet addresses with the defendants.
Robinhood: Source of Corporate Secrecy
Each defendant faces one count of violating the Commodity Exchange Act, carrying a maximum sentence of 10 years in prison, and one count of wire fraud, carrying a maximum sentence of 20 years. The case is being handled by the SDNY’s Securities and Commodities Fraud Task Force, under the supervision of Assistant U.S. Attorney Alexandra N. Rothman. U.S. Attorney Jamie McDonald publicly acknowledged Robinhood’s cooperation with the FBI during the investigation.
On-Chain Traces
The inherent transparency of Hyperliquid played a central role in the investigation. By recording positions and timestamps on the blockchain, the suspicious activity was detected by independent analysts months before the formal charges were filed. On-chain researchers had flagged wallets that opened positions on Hyperliquid shortly before each listing announcement, including a cluster linked to a short position opened hours before Robinhood published its first-quarter 2026 earnings.
McDonald was explicit in closing the door on a potential defense argument: trading on a decentralized platform does not exempt a corporate employee from U.S. commodities and securities laws when the trading advantage stems from stolen information.
The SDNY frames the case under the misappropriation theory, which holds that the confidentiality of material information does not disappear simply because the order is executed on an on-chain protocol. Both defendants are presumed innocent until proven guilty.
