BREAKING: Crisis at a Cryptocurrency Exchange—Developers Opened Positions Before Token Listings

The U.S. Department of Justice (DOJ) announced that two engineers working for Robinhood Markets have been charged with using the company’s confidential listing information to trade Hyperliquid.

According to a statement from the Southern District of New York Attorney’s Office, Hefu Chai and Huaisong Xiang, also known as “Jerry Xiang,” face charges of commodity fraud and fraud via electronic communications. The prosecution alleges that the two employees used non-public information belonging to Robinhood for personal gain.

According to the indictment, Chai and Xiang, due to their roles at Robinhood, had access to undisclosed information regarding which cryptocurrencies would be listed on the company’s cryptocurrency platform, Robinhood Crypto, and when.

Prosecutors stated that the two engineers opened perpetual futures positions in those tokens on the decentralized derivatives exchange Hyperliquid between 2025 and 2026, prior to Robinhood’s announcement that it would list various cryptocurrencies.

According to the DOJ, Chai and Xiang profited from price fluctuations following the public announcement of Robinhood’s listing decisions. Both employees are alleged to have illegally profited over $50,000 each from these transactions.

U.S. Attorney for the Southern District of New York, Jamie McDonald, stated that using confidential corporate information for personal gain in derivatives markets is illegal, adding that insiders cannot evade capital market and commodity laws by using perpetual futures, tokenized securities, or similar financial instruments.

FBI New York Office Deputy Director James C. Barnacle Jr. stated that the defendants are alleged to have used sensitive information obtained from their employers for their own benefit, and that the FBI will continue to act in similar cases.

*This is not investment advice.