Robinhood Employees Charged Over Alleged Hyperliquid Insider Trading

Two former Robinhood employees face fraud charges over alleged insider trading using confidential crypto listing information on Hyperliquid

Two former Robinhood employees have been charged with commodities fraud and wire fraud after U.S. prosecutors alleged they used confidential information about upcoming cryptocurrency listings to trade perpetual futures on Hyperliquid.

The charges against engineers Hefu Chai and Huaisong Xiang were announced by the U.S. Attorney’s Office for the Southern District of New York on September 15, 2026. According to prosecutors, the pair allegedly used nonpublic information obtained through their work at Robinhood to trade ahead of public announcements involving new cryptocurrency listings.

Alleged Trades Ahead of Robinhood Listings

According to complaints unsealed in Manhattan federal court, Chai and Xiang had access to confidential information concerning whether and when Robinhood Crypto would support additional cryptocurrencies.

Prosecutors allege that between 2025 and 2026, the two repeatedly purchased perpetual futures linked to cryptocurrencies on Hyperliquid before Robinhood publicly announced that the underlying tokens would be available on its platform. Each allegedly generated more than $50,000 from the trades.

Hyperliquid is a decentralized derivatives exchange that offers perpetual futures, a type of derivative that allows traders to take positions on the price movements of an underlying asset without owning the asset directly. Unlike conventional futures contracts, perpetuals do not have an expiration date and can remain open indefinitely, subject to funding payments.

The allegations center on the use of confidential information rather than ordinary trading based on publicly available listing announcements.

Charges Carry Potential Prison Sentences

Chai, 36, of Menlo Park, California, and Xiang, 30, of Jersey City, New Jersey, each face one count of violating the Commodity Exchange Act and one count of wire fraud.

The Commodity Exchange Act charge carries a maximum sentence of 10 years in prison, while the wire fraud charge carries a maximum sentence of 20 years. The Justice Department emphasized that those are statutory maximums and that any sentence would ultimately be determined by a judge.

The cases are being handled by the Securities and Commodities Fraud Task Force of the U.S. Attorney’s Office for the Southern District of New York.

Robinhood Says It Reported the Matter

Robinhood said it has a strict policy against insider trading and took action after investigating the matter.

The company said it maintains insider-trading policies and procedures covering new cryptocurrency listings and that it reported the matter to law enforcement and regulators. Robinhood also said it would continue cooperating with the investigations.

Xiang’s attorney, Robert Stahl, said his client denies the charges and intends to defend himself in court, according to Bloomberg.

The Justice Department said the charges are allegations and that both defendants are presumed innocent unless and until proven guilty. The next stage of the cases will proceed through the federal court process.

writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.