Two Robinhood employees have been sued for insider trading for pre-positioning through Hyperliquid before the coin listing

On September 15, local time, the U.S. Attorney's Office for the Southern District of New York (SDNY) announced that two Robinhood engineers, Hefu Chai and Huaisong Xiang (also known as Jerry Xiang), have been charged with commodity fraud and wire fraud for allegedly trading Hyperliquid perpetual contracts using non-public information from the company.

SDNY stated that during their tenure at Robinhood, the two had access to confidential information regarding the launch of new tokens and their launch timelines from Robinhood Crypto. Between 2025 and 2026, they are accused of repeatedly purchasing Hyperliquid perpetual contracts for the corresponding tokens before the company publicly announced the launch of those tokens, profiting after the news broke, with each allegedly earning over $50,000. Prosecutors emphasized that although perpetual contracts are traded on blockchain derivative platforms, they still fall under accountable financial instruments.

U.S. Attorney Jamie McDonald stated that corporate insiders cannot evade relevant securities and commodities market laws by trading perpetual contracts, tokenized securities, or other similar financial products. The 36-year-old Chai will appear in court in the Northern District of California, while the 30-year-old Xiang will appear in federal court in the Southern District of New York. The maximum penalty for violations of the Commodity Exchange Act they face is 10 years in prison, and for wire fraud, up to 20 years in prison. SDNY emphasized that the contents of the indictment at this stage are merely allegations, and both defendants are presumed innocent until proven guilty in court.