DOJ charges ex-Robinhood engineers in Hyperliquid insider scheme — SkimNews
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- Hefu Chai and Huaisong "Jerry" Xiang were charged by the DOJ with one count of violating the Commodity Exchange Act (up to 10 years) and one count of wire fraud (up to 20 years) for allegedly opening long positions on Hyperliquid perpetuals before Robinhood listed the underlying tokens.
- Both engineers were designated "Coin Aware Individuals" with access to a private Robinhood Slack channel containing planned listing dates, and the company's policy barred members from trading on any platform 24 hours before or after a listing announcement.
- Chai, a technical lead for new digital-asset listings at Robinhood from ~2021 to May 2026, allegedly traded perpetuals ahead of at least 10 listings including MEW, MOODENG, ASTER, XPL, HYPE, ENA and AERO.
- Xiang, a software engineer involved in crypto listings from ~2024 to September 2026, allegedly first traded POPCAT perpetuals in March 2025 before trading ahead of at least 10 other listing announcements.
- US Attorney Jamie McDonald said corporate insiders "cannot evade securities and commodities laws by trading misappropriated information through perpetual futures, tokenized securities or similar instruments."
- The case draws parallels to the 2023 Coinbase insider-trading case but, per prosecutors, is the first to extend insider-trading liability into decentralized derivative markets rather than direct spot-token purchases.
- Robinhood did not respond to Cointelegraph's request for comment before publication.
Why it matters: Each engineer allegedly earned more than $50,000 across roughly a year of trades, and prosecutors are using the case to draw a hard line that decentralized derivative venues like Hyperliquid offer no shelter from US commodities and wire-fraud statutes — putting every insider with pre-listing data across centralized exchanges on notice.
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