DOJ · New York · Federal Reserve (FED) · The Block
DOJ charges Robinhood former engineers with front-running crypto listings on Hyperliquid
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Two former Robinhood engineers have been accused of front-running crypto token listings on the brokerage platform.
Key facts
- According to prosecutors, the two repeatedly took positions in tokens ahead of Robinhood's public listing announcements between 2025 and 2026, with each allegedly profiting more than $50,000
- Chai, 36, and Xiang, 30, each face one count under the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence
- The trader ultimately made roughly $150 million to $ 200 million
- Of note, a Hyperliquid trader last October opened BTC and ETH shorts shortly before President Donald Trump announced 100% tariffs on China
Summary
The U.S. Department of Justice charged Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud, alleging they misappropriated confidential information about upcoming cryptocurrency listings on Robinhood Crypto and used it to trade perpetual futures on Hyperliquid. According to prosecutors, the two repeatedly took positions in tokens ahead of Robinhood's public listing announcements between 2025 and 2026, with each allegedly profiting more than $50,000. "Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal," said Jamie McDonald, United States Attorney for the Southern District of New York, in a release. Chai, 36, and Xiang, 30, each face one count under the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison.