Robinhood engineers charged over fraudulent Hyperliquid trades
Federal charges filed against two Robinhood engineers
The U.S. Department of Justice filed fraud charges on September 15, 2026, against two former Robinhood engineers, Hefu Chai (36) and Huaisong Xiang (30). They are accused of using confidential information about upcoming cryptocurrency listings on the Robinhood app to trade on Hyperliquid, a decentralized exchange for perpetual futures. This constitutes trading on secret, non-public information that gave them an unfair advantage over other investors.
Key figures and allegations
- Accusations: Wire fraud and commodities fraud.
- Amounts: Each individual allegedly made over $50,000 between 2025 and 2026 using the undisclosed information.
- Timing: The trades allegedly occurred minutes before specific tokens were listed publicly on Robinhood.
- Current status: Both men have left their positions with Robinhood.
What U.S. Attorney Jamie McDonald said
U.S. Attorney Jamie McDonald of the Southern District of New York stated that the charges clarify a legal principle. Corporate insiders cannot avoid securities and commodities laws by using misappropriated information to trade derivatives like perpetual futures or tokenized securities. The filing argues that trading these specific instruments with inside information is equivalent to trading traditional stocks or commodities with inside information.
Robinhood's response
A Robinhood spokesperson stated that the company takes market integrity seriously and has zero tolerance for insider trading. They confirmed that Robinhood has specific policies and procedures for new crypto listings to prevent this. The company stated that they immediately investigated the matter, reported it to law enforcement and regulators, and will continue to cooperate with the ongoing investigation.
Independent researcher findings
Protos notes that onlookers linked the federal filing to the work of pseudonymous researcher "Astra Trades." This researcher previously identified a series of trades in 2025 where a single user bought dozens of tokens minutes before their public listing on Robinhood. The researcher also tracked suspicious short positions on Robinhood stock on Hyperliquid that were placed just before earnings calls, believing the same trader was involved in both activities.
Broader context of crypto insider trading
This case is not the first involving major U.S. exchanges. In 2023, a former Coinbase employee was sentenced after tipping off relatives about upcoming listings, marking the U.S.'s first crypto insider trading conviction. Additionally, concerns about insider trading have recently been raised in crypto-based prediction markets, specifically regarding trades linked to Israeli military action, the kidnapping of Venezuelan President Nicolás Maduro, and the Nobel Peace Prize.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.