Two Former Robinhood Engineers Charged Over Hyperliquid Trades

Federal prosecutors in Manhattan charged two former Robinhood engineers on Tuesday over trades placed ahead of the company's own listing announcements. 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 government says they knew which tokens Robinhood Crypto was preparing to list and bought perpetual futures on those tokens on Hyperliquid before the listings were public. Each allegedly made more than $50,000. The conduct is dated between 2025 and 2026.

Why the first count is a commodities charge

The instrument matters here. A perpetual future is a contract that tracks a token's price with no expiry date, and the ones in this case traded on Hyperliquid, not on Robinhood. So the alleged trading never touched the tokens themselves. That is the difference from the Coinbase listing case both accounts reach for, where the defendant bought the assets. The Commodity Exchange Act count carries a maximum of ten years and the wire fraud count a maximum of twenty. Both are ceilings, not sentences.

Two outlets, two sentences from one statement

Jamie McDonald, the U.S. Attorney for the Southern District of New York, is quoted in both accounts read for this piece, and not saying the same thing.

"Corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives," McDonald said, in the wording Decrypt carried.

The Block published a different sentence from him, that misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. Both read like extracts from one longer announcement, and neither outlet reproduces the other's line. The full text is not in any account read here.

The company says it made the referral

Decrypt carried a statement from Robinhood: "We take market integrity seriously and have zero tolerance for insider trading. We immediately investigated and reported this matter to law enforcement." No other account read for this piece has it, so that claim rests on a single outlet. The Block's story carries nothing from the company and nothing from Hyperliquid, the venue the trades ran through. Counsel for neither engineer appears anywhere. Robinhood was in the news a day earlier for an unrelated reason, putting voting rights and 1:1 share redemption on its token roadmap, and none of the accounts connects the two.

A precedent the accounts date differently

Both outlets use the Coinbase prosecution as the reference point, and they put it in different years. The Block dates it to 2022. Decrypt puts Ishan Wahi's case in 2021 and says he pleaded guilty to wire fraud conspiracy over token listings. The two do not reconcile, and neither outlet acknowledges the other's date. In both accounts the comparison does the same work. It marks this as the version where the alleged trading sat in derivatives instead of spot, a corner of the market that has drawn separate official attention, including a CFTC motion to throw out CME's lawsuit over perpetual futures.

Nothing has been tested yet

Charges are allegations. No plea, arraignment date or trial schedule appears in any of the accounts, and no outlet gives a trade count or a combined profit figure beyond the $50,000 attributed to each man. Whether Hyperliquid was asked for comment is not stated anywhere either. The one number every account agrees on is a small one, and it sits next to two statutory maximums that add up to thirty years.