Two Robinhood engineers charged with trading on secret listing data
Federal prosecutors have charged two Robinhood software engineers with using confidential listing data to trade cryptocurrency derivatives before the public knew which tokens the brokerage planned to add. The case adds to a growing list of insider-trading actions tied to crypto derivatives platforms, following a similar dispute involving Jane Street Group and the collapse of TerraUSD.
- Hefu Chai, 36, and Huaisong Xiang, 30, face commodities fraud and wire fraud charges from the Southern District of New York.
- Prosecutors say each engineer made more than $50,000 trading Hyperliquid perpetual futures tied to unannounced Robinhood Crypto listings.
- The alleged scheme ran repeatedly between 2025 and 2026, according to the Department of Justice.
- $50,000+ alleged profit each engineer pocketed per the DOJ complaint
- 20 years maximum prison term for the wire fraud count
- 10 years maximum prison term for the commodities fraud count
- $192M value of UST Jane Street allegedly sold before its 2022 collapse
The Department of Justice unsealed complaints in the Southern District of New York accusing Chai and Xiang of misusing their access to Robinhood’s internal listing plans. According to CryptoPotato, both men worked as engineers at the trading platform and could see which tokens were slated for future listings before those decisions became public.
Engineers allegedly bought Hyperliquid futures ahead of Robinhood listings
Prosecutors allege Chai and Xiang used that non-public information to open perpetual futures positions on Hyperliquid tied to tokens Robinhood was preparing to list. They executed the trades before the exchange’s own announcements moved the market, according to the unsealed complaints.
The DOJ says the pattern repeated across 2025 and into 2026, not as an isolated incident. Each defendant is accused of profiting more than $50,000 from the trades.
US attorney jamie mcDonald says Derivatives traders cannot evade Insider rules
The DOJ has filed a criminal complaint charging both men with commodities fraud, which carries a maximum ten-year sentence, and wire fraud, which carries a maximum twenty-year sentence. U.S. Attorney Jamie McDonald framed the case as a warning to insiders who trade in newer derivative products rather than traditional securities.
Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. That is exactly what we allege Hefu Chai and Huaisong Xiang have done. Today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments.
Jamie McDonald, US Attorney
Chai lives in Menlo Park, California, and Xiang lives in Jersey City, New Jersey. Neither Robinhood nor the defendants have offered public comment in the reporting reviewed for this story.
Chai and Xiang face separate court dates as Jane Street comparison resurfaces
Chai is scheduled to appear in federal court in Northern California, while Xiang is set to appear before a federal magistrate judge in New York. Neither a plea nor a trial date has been reported yet.
The charges revive comparisons to Jane Street Group, which New York prosecutors accused earlier this year of using a private Telegram channel to get early insight into Terraform Labs’ handling of the TerraUSD collapse in May 2022. Prosecutors in that case alleged Jane Street sold roughly $192 million worth of UST before the token lost its dollar peg, a sum nearly 4,000 times larger than the profit alleged in the Robinhood case.
The BlockWest read. For exchanges and brokerages, this is a reminder that listing calendars are now market-moving inside information, not internal housekeeping. Firms like Robinhood will likely face pressure to tighten access controls around pre-listing token data the same way equities desks wall off M&A pipelines, and platforms like Hyperliquid may see renewed scrutiny over how easily perpetual futures let insiders convert non-public data into leveraged bets.
Chai’s Northern California court appearance and Xiang’s SDNY magistrate hearing have not yet been dated in the reporting reviewed, leaving open whether either defendant will contest the charges or seek a plea agreement before trial.
BlockWest is a news publication. Nothing here is investment advice. Read our disclaimer and editorial policy.
