Two Robinhood Engineers Accused of Hyperliquid Insider Trading

On Tuesday, two engineers from Robinhood were charged with fraud in connection with an insider trading case on Hyperliquid. They are accused of buying futures contracts before their employer announced new token listings.

The defendants, Hefu Chai (36) and Huaisong Xiang (30), each face one count of violating the Commodity Exchange Act and one count of wire fraud. Prosecutors allege that each made more than $50,000 from the trades.

How the Alleged Trades Worked

Hyperliquid operates a decentralized exchange centered on perpetual futures. These are leveraged bets on a token's price that never expire, allowing traders to hold positions indefinitely.

According to the U.S. Attorney's Office for the Southern District of New York, the engineers executed trades between 2025 and 2026. They had prior knowledge of which tokens Robinhood Crypto planned to list and purchased futures on those tokens ahead of the announcements.

A listing on a major brokerage typically boosts a token's price. Selling into that rise enabled the engineers to convert their advance information into profit.

“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal.”

The remark was attributed to U.S. Attorney Jamie McDonald in a statement.

Hyperliquid Has Faced Insider Trading Claims Before

In December 2025, the exchange dealt with similar accusations. Traders flagged a wallet that was shorting HYPE during a token unlock, and Hyperliquid refuted claims of insider trading by its staff.

Hyperliquid stated that the wallet belonged to a former employee let go in early 2024. The firm also noted that team members are barred from trading HYPE derivatives.

On Tuesday, HYPE was trading around $77, down 4.5% over the past 24 hours. The token ranks 11th by market capitalization, valued at roughly $17.1 billion.

The charges come as Robinhood expands its crypto business with its own blockchain, perpetual futures in Europe, and tokenized stock trading. Robinhood has not yet issued a public response.