Futures Trading with Robinhood’s Confidential Listing Info: US Charges Two Former Employees

The U.S. Department of Justice has charged two former Robinhood engineers for allegedly trading on Hyperliquid using confidential listing information.

The U.S. Department of Justice has charged former Robinhood employees, Hefu Chai and Huaisong Xiang, with trading using confidential information regarding tokens that were soon to be listed on Robinhood Crypto.

According to the allegations, Chai and Xiang repeatedly traded between 2025 and 2026 using Robinhood’s non-public listing plans. These trades were executed through perpetual futures contracts on Hyperliquid instead of purchasing the tokens to be listed directly. According to the prosecution, both individuals separately earned over $50,000 in profits from these trades.

Two separate charges for former Robinhood employees

Chai and Xiang are charged with commodity fraud and wire fraud. Each faces a maximum of 10 years in prison under the commodity fraud charge and a maximum of 20 years in prison under the wire fraud charge.

Jamie McDonald, attorney for the Southern District of New York, stated that using confidential internal information for personal gain in derivative markets is illegal. McDonald said that employees cannot escape legal responsibility by using such information via perpetual futures, tokenized securities, or similar financial instruments.

Robinhood, meanwhile, stated that it has zero tolerance for insider trading. The company stated that it conducted an internal investigation, reported the incident to law enforcement and regulatory agencies, and will cooperate with ongoing investigations.

A similar federal charge involving the use of confidential listing information in the crypto industry was filed in 2022. In that case, the defendants were accused of learning about Coinbase’s token listings in advance and trading directly in the relevant assets. The distinction in the Robinhood case stands out as the alleged trades were conducted in perpetual futures instead of the tokens themselves.