Ex-Robinhood Engineers Charged With Crypto Insider Trading via Hyperliquid

Two former Robinhood engineers have been charged with commodities fraud and wire fraud for allegedly exploiting confidential information about upcoming cryptocurrency token listings to profit from perpetual futures trades on Hyperliquid. According to the US Department of Justice, Hefu Chai and Huaisong "Jerry" Xiang each earned more than $50,000 between 2025 and 2026 by opening long positions on Hyperliquid perpetuals tied to tokens before they were listed on Robinhood Crypto, then closing those positions once prices rose following the public announcement.

Prosecutors said both engineers had access to a private Slack channel at Robinhood designated for "Coin Aware Individuals" containing planned listing dates and token information. The company's internal policy explicitly barred members of that group from trading on any platform within 24 hours before or after a listing announcement. Despite this, Chai allegedly traded perpetuals ahead of at least 10 announcements involving tokens including Cat in a Dogs World (MEW), Moo Deng (MOODENG), Aster (ASTER), Plasma (XPL), Hyperliquid (HYPE), Ethena (ENA), and Aerodrome Finance (AERO). Xiang allegedly began with Popcat (POPCAT) perpetuals in March 2025 and similarly traded ahead of at least 10 subsequent listings.

Chai served as a technical lead for new digital-asset listings at Robinhood from approximately 2021 until May 2026, while Xiang worked as a software engineer involved in crypto listings from around 2024 until September 2026. US Attorney Jamie McDonald stated that corporate insiders cannot evade securities and commodities laws by trading misappropriated information through perpetual futures, tokenized securities, or similar instruments. The case draws clear parallels to the 2022 Coinbase insider-trading prosecution, though it notably extends the issue into decentralized derivatives markets rather than direct token purchases, highlighting a growing enforcement focus on how traditional financial misconduct manifests in DeFi infrastructure.