Two Robinhood Employees Charged with Fraud for Trading on Secret Data

The Southern District of New York Attorney's Office has filed criminal charges against Hefu Chai, 36, and Huaisong Xiang, 30, engineers at Robinhood. Both allegedly used non-public information from the company to conduct trades in the financial market. It is claimed that the maneuvers occurred between 2025 and 2026, during which they purchased contracts related to assets that Robinhood planned to include in its offering before the official announcements, generating individual profits exceeding $50,000. For these transactions, they allegedly used Hyperliquid, a decentralized exchange. On such platforms, perpetual futures allow speculation on the future price of an asset without acquiring the underlying currency. Both face up to 10 years in prison for violating the Commodity Exchange Act and up to 20 years for electronic fraud. Initial appearances are scheduled in the Northern District of California. The use of confidential information has been subject to scrutiny in the industry, and the Department of Justice emphasized that trading in decentralized venues does not exempt one from federal oversight.