US Indicts Ex-Robinhood Engineers for Alleged Pre-Listing Crypto Trades

U.S. prosecutors have charged two former Robinhood engineers with fraud allegations tied to cryptocurrency token listings, accusing them of using confidential internal information to profit from perpetual futures trades on Hyperliquid. According to the U.S. Department of Justice (DOJ), Hefu Chai and Huaisong “Jerry” Xiang bought perpetual contracts connected to tokens shortly before those assets debuted on Robinhood Crypto. The DOJ alleges each defendant earned more than $50,000 from the trades between 2025 and 2026. Key takeaways The DOJ alleges Robinhood engineers accessed nonpublic listing plans via a private Slack channel and traded perpetual futures on Hyperliquid ahead of announcements. Prosecutors say the alleged strategy relied on opening long positions before tokens listed and closing after their value rose following debut. The charges extend insider-trading-style conduct into decentralized derivatives markets, rather than spot token purchases alone. Prosecutors argue that company “insider” restrictions do not prevent liability if misappropriated information is used to trade derivatives. Both defendants are presumed innocent, and the charges remain allegations. DOJ alleges inside information drove pre-listing perpetual trades In a press release describing the case, the DOJ said Chai and Xiang traded based on upcoming listing information they allegedly obtained through Robinhood’s internal systems. Prosecutors allege that each used the information to buy perpetual contracts linked to specific tokens before those tokens were announced as listings on Robinhood Crypto. After the tokens’ debut, the DOJ claims the defendants closed their positions at higher prices. The agency’s filings state that the alleged profits for each defendant exceeded $50,000. The alleged mechanism matters for market structure: perpetual futures allow traders to take leveraged exposure without necessarily buying the underlying asset directly. The DOJ’s theory therefore targets a broader category of “derivatives” behavior than cases limited to spot markets. Robinhood roles, access controls, and alleged policy breaches The DOJ complaints say Chai worked at Robinhood from around 2021 until May 2026 and served as a technical lead tied to new digital-asset listings. Xiang, prosecutors allege, worked at Robinhood from around 2024 until September 2026 and was a software engineer involved in crypto listings. According to the DOJ, Robinhood designated both men as “Coin Aware Individuals,” granting them access to a private Slack channel that contained planned listing dates. The DOJ also alleges the engineers traded in a way that violated a company policy restricting members of that group from trading on Robinhood—or any other platform—within 24 hours before or after a listing or delisting announcement. Prosecutors further allege Chai traded perpetuals ahead of at least 10 listing 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).