Two Robinhood employees have been indicted on suspicion of insider trading, with those involved allegedly positioning in advance through Hyperliquid before token listings.

BlockBeats news, September 16: The U.S. Attorney's Office for the Southern District of New York (SDNY) announced on September 15 local time that two Robinhood engineers, Hefu Chai and Huaisong Xiang, also known as Jerry Xiang, have been charged with commodities fraud and wire fraud for allegedly using confidential company information to trade Hyperliquid perpetual contracts.

SDNY said that during their employment at Robinhood, the two had access to confidential information about new token listings and listing timing at Robinhood Crypto. Between 2025 and 2026, they allegedly bought Hyperliquid perpetual contracts for the relevant tokens multiple times before the company publicly announced the listings, and profited after the news became public; each allegedly made more than $50,000 in profits.

Prosecutors emphasized that although perpetual contracts are traded on on-chain derivatives platforms, they are still financial instruments that can be subject to liability. U.S. Attorney Jamie McDonald said that corporate insiders cannot evade laws governing securities and commodities markets by trading perpetual contracts, tokenized securities, or other similar financial products.

The case will also become an important signal for the regulation of on-chain derivatives. In the past, trading before token listings was mostly viewed by the market as a matter of informational advantage within the crypto industry; SDNY's direct filing of commodities fraud and wire fraud charges means law enforcement will more clearly extend traditional insider information rules to decentralized perpetual contract markets.

According to the announcement, 36-year-old Chai will appear in the Northern District of California, and 30-year-old Xiang will appear in the federal court for the Southern District of New York. The two face a maximum sentence of 10 years in prison for commodities trading law violations and a maximum sentence of 20 years in prison for wire fraud. SDNY emphasized that the contents of the indictment at this stage are allegations only, and both defendants are presumed innocent until a court ruling.