Catenaa, Monday, September, 21, 2026- The US Department of Justice has charged two former Robinhood engineers with commodities and wire fraud, alleging they used confidential information about upcoming crypto listings to place profitable perpetual futures trades on Hyperliquid. https://www.justice.gov/usao-sdny/pr/two-robinhood-employees-charged-fraud
Federal prosecutors in Manhattan charged Hefu Chai, 36, and Huaisong Xiang, 30, following an investigation by the FBI.
The Justice Department alleges the engineers had access to nonpublic information about cryptocurrencies Robinhood planned to add to its trading platform.
Prosecutors said Chai and Xiang repeatedly opened perpetual futures positions linked to those tokens before Robinhood publicly announced their listings between 2025 and 2026.
Each allegedly made more than $50,000 from the trades.
Perpetual futures allow traders to speculate on an asset’s price without owning it. Unlike conventional futures, the contracts have no expiration date and use periodic funding payments to keep prices aligned with the underlying market.
The case is notable because prosecutors are applying federal commodities and fraud laws to trades involving crypto derivatives rather than purchases of the underlying tokens.
Each defendant faces one count of violating the Commodity Exchange Act, carrying a maximum sentence of 10 years, and one count of wire fraud, carrying a maximum sentence of 20 years.
The maximum penalties are set by law and do not indicate what sentences would be imposed if the defendants are convicted.
Robinhood said it detected the matter internally, investigated it and reported it to law enforcement and regulators.
The company said it has no tolerance for insider trading and would continue cooperating with authorities.
The charges remain allegations, and Chai and Xiang are presumed innocent unless proven guilty.
The case follows an earlier federal prosecution involving confidential crypto listing information.
In 2022, prosecutors charged former Coinbase product manager Ishan Wahi and two associates in what the Justice Department described as its first cryptocurrency insider-trading tipping case.
Wahi had access to confidential information about planned Coinbase listings and passed it to associates who bought tokens before the announcements. He pleaded guilty to wire fraud conspiracy in 2023 and was sentenced to two years in prison.
The Robinhood case differs because prosecutors allege the defendants did not trade the tokens directly. Instead, they used the information to take positions in perpetual futures on Hyperliquid.
That distinction could make the case important for enforcement across increasingly complex crypto markets.
The Justice Department said corporate employees cannot avoid commodities and fraud laws simply by using derivatives, tokenized securities or similar instruments to trade on confidential information.
