Two Robinhood engineers have been charged within the US over an alleged crypto buying and selling scheme involving confidential firm info.
The US Division of Justice stated Hefu Chai and Huaisong Xiang allegedly used private info from Robinhood to commerce crypto perpetual futures on Hyperliquid.
Buying and selling on Confidential Knowledge
In accordance with complaints unsealed by the Southern District of New York, Chai and Xiang had entry to details about upcoming cryptocurrency listings on Robinhood Crypto. Prosecutors allege that they used that info earlier than the listings had been introduced to the general public.
The 2 engineers allegedly purchased perpetual futures linked to tokens that Robinhood was making ready to record. They traded on Hyperliquid earlier than Robinhood made the listings public. The DOJ stated each males repeatedly adopted this sample between 2025 and 2026. Every defendant allegedly made greater than $50,000 from the trades.
The DOJ has charged each Chai and Xiang with commodities fraud and wire fraud. The commodities fraud cost carries a most sentence of 10 years in jail. The wire fraud cost carries a most sentence of 20 years.
Chai, 36, is from Menlo Park, California. Xiang, 30, is from Jersey Metropolis, New Jersey. Chai is about to seem in federal court docket in Northern California, whereas Xiang is scheduled to seem earlier than a federal Justice of the Peace decide in New York.
US Lawyer Jamie McDonald acknowledged,
“Misappropriating confidential info to commerce within the derivatives markets for private profit is against the law. That’s precisely what we allege Hefu Chai and Huaisong Xiang have achieved. At this time’s fees clarify that company insiders can not evade the securities and commodities legal guidelines by buying and selling primarily based on misappropriated info in derivatives like perpetual futures, tokenized securities, or different comparable monetary devices.”
Jane Road’s $192M Exit
The allegations additionally carry one other comparable high-profile case again into focus.
Earlier this 12 months, Jane Road Group confronted allegations over its buying and selling exercise across the collapse of TerraUSD (UST) in Might 2022. New York prosecutors accused the key Wall Road buying and selling agency of utilizing a personal Telegram channel to speak with insiders at Terraform Labs, the corporate behind UST.
Prosecutors alleged that the entry gave Jane Road an early view of what was taking place across the stablecoin. The agency was then accused of promoting about $192 million value of UST earlier than the token collapsed.
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