Prosecutors say a Robinhood engineer bought Hyperliquid perps before 9 coin listings
Federal prosecutors in Manhattan charged two former Robinhood engineers with fraud, alleging they used secret listing plans to bet on Hyperliquid. Each allegedly made more than $50,000, and both are presumed innocent.
Key points
- Two former Robinhood engineers were charged in New York on September 15, 2026, with trading on secret coin listing plans. Both are presumed innocent.
- Prosecutors allege they bought Hyperliquid perpetual futures before Robinhood announced listings, and that each made more than $50,000.
- The complaint against Hefu Chai gives nine examples, including HYPE, ENA, LDO and DOT, with tips arriving one to seven days before the public announcement.
The charges
Federal prosecutors in Manhattan charged two former Robinhood engineers on September 15, 2026, with trading on secret plans to list new coins. Hefu Chai, 36, of Menlo Park, California, and Huaisong Xiang, 30, of Jersey City, New Jersey, each face one count under the Commodity Exchange Act and one count of wire fraud, the US Attorney's Office said.
Prosecutors allege that between 2025 and 2026 both men bought perpetual futures on Hyperliquid before Robinhood announced it would list the underlying tokens. A perpetual future, or "perp", is a derivative that tracks a token's price and never expires. Each man allegedly profited by more than $50,000. The charges are allegations, and both defendants are presumed innocent unless proven guilty.
US Attorney Jamie McDonald said: "Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal."
How the alleged scheme worked
The complaint against Chai, sworn by FBI Special Agent Joseph Kim, describes him as a technical lead responsible for listing new digital assets on Robinhood Crypto from 2021 to May 2026. He had access to a private Slack channel about upcoming listings, the complaint says.
According to prosecutors, each time a listing was flagged in that channel, Chai opened long positions on Hyperliquid, meaning bets that the price would rise. In most cases he allegedly closed them before the public announcement. The complaint ties three Hyperliquid wallets to a crypto account in his name, citing transfers that include about $100,000 sent from one wallet to that account between November 2025 and March 2026.
The complaint says Chai traded this way on at least 10 occasions. It gives nine of them as examples, covering 11 tokens: MEW and MOODENG, ASTER and XPL, HYPE, ENA, AERO, SYRUP, LDO, DOT and LIT. It does not identify the 10th.
The complaint also says Chai knew about Robinhood's insider trading policy and cites a November 2024 email that told him to keep listing information confidential.
What the two men face
The two counts carry heavy maximums on paper: up to 10 years in prison for the Commodity Exchange Act count and up to 20 years for wire fraud, prosecutors said. Any sentence would be set by a judge.
The legal theory is misappropriation. Prosecutors say both men owed Robinhood a duty to keep listing plans confidential and broke it by trading on them. The commodities charge rests on a CFTC anti-fraud rule, 17 C.F.R. 180.1, cited in the Chai complaint. Because the trades were perpetual futures, which are derivatives, the case falls under commodities law rather than securities law.
Chai was to appear in federal court in the Northern District of California. Xiang was to appear before US Magistrate Judge Ona T. Wang in Manhattan. FBI Assistant Director in Charge James C. Barnacle Jr. said the FBI will act when people use sensitive business information for their own gain.
How much warning he allegedly had
The gap between the internal tip and the public announcement ranged from one to seven days in the events listed in the Chai complaint. The chart shows the number of days between the date the tip appeared in Slack and the date Robinhood announced each listing, as set out in the complaint.
Days from internal tip to Robinhood listing announcement (alleged)
days
Source: US v. Chai complaint, SDNY. Allegations only.
Robinhood's role
US Attorney Jamie McDonald thanked Robinhood for its cooperation, the press release says. The complaint leans heavily on the company's own records. It cites documents provided by Robinhood, messages from the confidential listings channel and Robinhood's periodic filings with the SEC. Robinhood itself has not been accused of wrongdoing.
Why a Hyperliquid trade could be traced
The case moves insider trading enforcement onto a decentralized derivatives venue. Prosecutors did not need the trades to happen on Robinhood itself. According to the complaint, the agent linked the wallets to Chai using Robinhood documents, Hyperliquid's website and records from crypto companies, tracing transfers between the wallets and an account in his name.
It also fits a wider pattern of derivatives insider cases in 2026. On August 28, 2026, the CFTC settled with a former White House teleprompter operator who allegedly used advance copies of speeches to trade presidential "mention" contracts on a prediction market. He agreed to pay back $107,539.02 in profits plus a $65,000 penalty and accepted a three-year trading ban, the CFTC said.
Timeline
First listing tip cited in the Chai complaint (MEW, MOODENG)
Last listed event in the complaint (LIT)
Chai's role at Robinhood ends, per the complaint
SDNY unseals complaints against Chai and Xiang
LC Insight analysis
This section is our reading of the facts above, not a statement of fact.
- We think this case will push exchanges to tighten who sees listing plans. A private Slack channel with many members is a big leak risk, and the complaint shows a perp bet on another venue can be traced back.
- Transparency cuts both ways. Hyperliquid's public trade records and transfers into a named account gave investigators a trail, so a decentralized venue offers little cover for alleged insider trades.
- Expect more listing front-running cases built on perps rather than spot tokens. Perps offer leverage and do not need a listing on the venue that holds the secret.
What's next
- Whether either defendant is indicted or reaches a plea
- Any parallel civil action by the CFTC
- Changes to listing confidentiality policies at major US exchanges
Disclaimer. This article is based on public information and the sources listed below as of the update time shown. It is for information only and is not investment, legal or tax advice. Figures may change as companies and authorities publish new data.
