On September 15, local time, the U.S. Attorney's Office for the Southern District of New York released two criminal complaints against Hefu Chai and Huaisong Xiang, who had worked as engineers at financial services company Robinhood. Prosecutors alleged that the two used nonpublic information about Robinhood Crypto's listing plans and timing, obtained through their work between 2025 and 2026, for personal trading. According to the allegations, they traded perpetual futures contracts on tokens scheduled to be listed, using Hyperliquid, which describes itself as a decentralized exchange. Perpetual futures are derivatives with no expiration date whose gains and losses depend on changes in the price of the underlying asset, rather than direct purchases of that asset.
According to the complaints, listing information was shared in an internal chat room accessible only to designated employees. The company's insider trading policy prohibited those employees from making related trades on Robinhood or other platforms before listing announcements and for 24 hours afterward. The complaint against Xiang described an instance in March 2025 in which, after receiving listing information about POPCAT, he took a position betting on a price increase and closed it at a profit after actual trading had begun on Robinhood but before the public announcement.
Prosecutors alleged that each man earned more than $50,000 through such trades. Each was charged with one count of commodities fraud and one count of wire fraud. Prosecutors said that company insiders who improperly use nonpublic information to trade cannot avoid the application of securities and commodities laws even if the instruments traded are perpetual futures or tokenized securities. They explicitly stated that the claims in the complaints are allegations only and that both men are presumed innocent unless and until proven guilty in court. According to The Block, Robinhood said it immediately conducted an internal investigation into the matter, reported it to law enforcement and regulators, and would continue to cooperate with the investigation.