A Robinhood crypto engineer accused of trading ahead of token listings on Hyperliquid had previously helped scale the company's crypto trading systems.
- Federal prosecutors charged Hefu Chai, 36, and Huaisong "Jerry" Xiang, 30, two Robinhood engineers, with commodities fraud and wire fraud on Tuesday, Sept. 15, alleging they repeatedly used confidential information about upcoming Robinhood Crypto listings to trade related perpetual futures between 2025 and 2026.
- Each allegedly made more than $50,000 from the trades, according to the complaints.
Chai helped scale Robinhood Crypto
Hefu Chai's connection to Robinhood's crypto infrastructure went beyond simply working at the company. In 2022, Robinhood described Chai as a member of its Crypto Engineering team in a technical post he co-authored about scaling the platform's crypto backend.
- The post described work on Robinhood Crypto's databases, order flows, load testing and settlement architecture as trading activity surged.
Prosecutors now allege Chai and Xiang had access through their jobs to non-public information about whether and when Robinhood would list additional cryptocurrencies.
They allegedly bought perpetual futures tied to those tokens on Hyperliquid, a decentralized derivatives exchange, before Robinhood publicly announced the listings.
- But the alleged payoff looks relatively small compared with Chai's apparent seniority.
- A public employment profile listed him as a senior staff software engineer at Robinhood, a level the brokerage currently advertises at $264,000 to $310,000 in annual base pay before bonuses and equity.
- If Chai made just around $50,000 from the alleged scheme, that would be roughly two months of base salary for a comparable Robinhood role.
Robinhood's rules explicitly covered outside platforms
Robinhood's own insider-trading policy is unusually specific about such activity.
Its December 2025 version says crypto trading restrictions apply "whether on Robinhood, or on another platform" and bars employees with material nonpublic information from trading a crypto asset or related financial instrument. It specifically lists "contemplated listings" as information that may be material.
Galaxy Digital research analyst Will Owens pointed out on X that Xiang's Hyperliquid wallet, identified in the complaint and ending in acf9, shows an unusually tight pattern.
- Its biggest winning trades in 2025 were longs opened and closed on the same day Robinhood listed the underlying token, with each position held for less than an hour.
- Owens highlighted gains of about $33,800 on ZORA, $21,700 on HBAR, $15,100 on SUI, $11,300 on MOODENG, $9,700 on WLFI, $5,500 on HYPE, $5,100 on ASTER and $4,400 on CRV, totaling roughly $106,600 across the eight trades.
Moreover, the Hyperliquid wallet prosecutors tied to Xiang had already drawn scrutiny months earlier.
- In April, an on-chain researcher @AstraTrades_ flagged the address ending acf9 on X over suspicious Robinhood-related trades, including a HOOD short opened shortly before the company's first-quarter earnings.
Insider #2 (0x8081c8c38e6196a906cda605444d66697e8bacf9) - 100k$ HL PnL from trading RH prebuys.https://t.co/9cbhe0yi5k pic.twitter.com/26ZXRZcduE
— Astra (@AstraTrades_) November 13, 2025
- At the time, any link to a Robinhood employee was unproven.
The Justice Department said Robinhood cooperated with the investigation.