Two Robinhood Engineers Are Charged With Trading on the Listings They Built

Federal prosecutors in New York have charged two former Robinhood engineers with using confidential information about upcoming cryptocurrency listings to trade perpetual futures on the decentralized exchange Hyperliquid, in a case that turns one of the company's more sensitive internal channels into the centerpiece of a fraud complaint.

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Hefu Chai, 36, and Huaisong Xiang, 30, who went by Jerry, were each charged with one count of commodities fraud and one count of wire fraud, the U.S. Attorney's Office for the Southern District of New York said on September 15. Each faces a maximum of 10 years in prison on the commodities count and up to 20 years on the wire fraud count. Prosecutors allege the two men made more than $50,000 each from the scheme, which ran across 2025 and early 2026.

Both worked on the machinery that decides which tokens Robinhood Crypto lists. Chai joined around 2021 and, until May 2026, served as a technical lead responsible for new digital-asset listings. Xiang joined around 2024 and worked as a software engineer on crypto listings out of Robinhood's Manhattan office until September 2026. Robinhood is not accused of wrongdoing and cooperated with the investigation, prosecutors said.

"Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal," U.S. Attorney Jamie McDonald said in a statement announcing the charges. "That is exactly what we allege Hefu Chai and Huaisong Xiang have done."

A private channel and a rule about 24 hours

The complaints describe a workplace with a small, explicitly designated group of employees. Robinhood labeled staff with access to listing plans as Coin Aware Individuals. That designation came with entry to a private Slack channel where the company discussed when and whether specific cryptocurrencies would be added. It also came with a rule: Coin Aware Individuals were, in the government's account, "strictly prohibited" from trading on Robinhood or on any other platform in the 24 hours before and after a listing or delisting announcement.

Prosecutors allege the two men went around that rule rather than through it. The complaints say that on repeated occasions, after learning from the Slack channel that a token was about to be listed, they opened long positions in perpetual futures tied to that token on Hyperliquid. Perpetual futures let a trader bet on an asset's price without owning it, and they keep that bet open without an expiry date. When the token became tradable on Robinhood, but before the company's public announcement, the two allegedly closed the positions and booked the gain.

The trade pattern is specific and dated. Chai is alleged to have traded ahead of at least ten listing announcements, covering tokens including MEW and MOODENG in May 2025, ASTER and XPL in October 2025, HYPE in late October, LDO in December, and DOT and LIT in January. Xiang is alleged to have started with POPCAT in March 2025 and then traded ahead of at least ten further announcements, including ONDO in August 2025 and RENDER in January 2026. In several instances the complaints note that the defendants closed positions the moment the token was live on Robinhood but before the public announcement went out, the gap in which the information still had value to anyone trading elsewhere.

Hyperliquid matters to the case for a practical reason. It is a decentralized exchange known for perpetuals, and it does not hold approval from the Commodity Futures Trading Commission to run a futures market in the United States. It uses geofencing to block users connecting from American IP addresses. The complaints say the defendants reached the platform anyway by using a virtual private network, which is the kind of detail that turns a workplace misconduct story into a cross-border market-access one.

Why this case uses commodities law

The charges lean on the Commodity Exchange Act and on wire fraud, not on securities fraud. That choice reflects what was traded. The positions were derivatives tied to token prices, executed on a venue that markets them as futures and other derivatives rather than as securities, and the government's theory is that misusing the information to trade those derivatives is fraud regardless of how any particular token is classified.

That framing is notable in a United States where the line between crypto commodities and crypto securities is still contested. It lets prosecutors pursue alleged insider dealing on perpetual futures without taking a position on whether the underlying tokens are securities. It also signals that the enforcement perimeter around crypto trading is being drawn to cover derivatives venues, including ones that operate offshore or on-chain.

The case is not the first time the government has treated confidential crypto venue information as property worth protecting. In 2022, federal prosecutors charged a former OpenSea employee with insider trading over non-public information about which NFTs would be featured on the marketplace's homepage, and the same year brought wire fraud and conspiracy charges against a former Coinbase product manager and his associates over crypto listing announcements. Those cases established that the government would treat "which asset gets listed next" as material non-public information when someone has a duty to keep it secret. The Robinhood complaints extend that logic to a decentralized derivatives exchange and to a very specific internal control, the Coin Aware designation.

The listing moment is the product

For readers outside crypto, the mechanics can look obscure, but the underlying fact is simple. A listing on a large retail brokerage moves the price of a small token, because it opens the asset to a pool of buyers who could not easily access it before. That makes advance knowledge of a listing genuinely valuable, and it makes the window between a token going live internally and the public announcement a place where someone with early access can trade against everyone else.

Robinhood's crypto business has grown quickly, and the company has expanded into perpetual futures itself. That combination explains why the internal Slack channel existed and why its contents were worth guarding. The complaints do not allege that the defendants traded the tokens on Robinhood, where the 24-hour prohibition was explicit and easy to police. They traded elsewhere, on a venue the company could not see and that was not set up to accept United States customers, which is the loophole the government says the two men built for themselves.

The charges also raise a question that extends past one firm. Centralized platforms that list assets sit on information the rest of the market would pay for, and smaller crypto teams often learn about a listing through the same process that is supposed to keep the news quiet. When trading venues are decentralized and pseudonymous, enforcing the duties of employees at the centralized companies they touch becomes harder, not easier. Prosecutors are testing whether the threat of prison can travel across that boundary.

How exchanges try to police the listing calendar

Brokerages have handled this problem in equities for decades, and the playbook is well known. Access to deal and listing information is limited to a named group, trading windows are restricted around announcements, personal accounts are monitored, and pre-clearance is required for employees who might be tempted. Robinhood's Coin Aware designation and its 24-hour rule are versions of that playbook, written for a company that adds digital assets on a rolling basis rather than in scheduled offerings.

Crypto complicates each of those controls. The assets trade around the clock, so a 24-hour blackout covers a lot of ground but is hard to monitor across venues. And the place where the alleged trades happened was not a regulated brokerage at all, but an on-chain exchange that markets perpetuals and restricts United States users through geofencing that a virtual private network defeats. Traditional surveillance assumes the firm can see the employee's trading. Here, prosecutors say, the trading happened somewhere the employer could not look, which is what made the information worth using.

Hyperliquid's rise is part of the backdrop. Over the past two years it has become one of the largest venues for perpetual futures, drawing volume that in some periods rivals centralized exchanges, and its native token has become a fixture of crypto trading. When a token is added to a major retail platform like Robinhood, prices move, and markets for that token elsewhere price in the news within seconds. That is the gap the complaint describes: a listing date known internally, a public announcement still hours away, and a liquid derivatives market sitting in between.

What to watch

Both defendants are presumed innocent, and the charges are allegations that have not been tested in court. Chai was set to appear in the Northern District of California, and Xiang was scheduled to appear before a federal magistrate in New York. Watch whether the case produces cooperation, civil follow-on actions from regulators, or new compliance requirements at exchanges that maintain listing plans.

The larger signal is about where the government thinks the line sits. If prosecutors can reach derivatives trading on an offshore, on-chain venue through a duty owed to a United States brokerage, then every crypto company with advance knowledge of its own product decisions is on notice. The listing calendar, in other words, is no longer just an operations document. It is treated as inside information, and the people who can see it are treated as insiders.