Robinhood engineers Hefu Chai and Huaisun Xiang have been formally charged with commodities fraud and wire fraud for allegedly using confidential information for personal gain during 2025 and 2026. Prosecutors say each made more than $50,000 in profit by trading perpetual futures linked to tokens before Robinhood publicly announced plans to list them on Robinhood Crypto.

According to prosecutors, Chai and Xiang repeatedly bought the perpetual futures on the decentralized exchange Hyperliquid. Their roles gave them access to non-public information about which cryptocurrencies Robinhood planned to add to its crypto platform and when the listings would occur, investigators said.

The engineers allegedly used that information to open positions on Hyperliquid before Robinhood’s announcements and closed the positions after the company disclosed the relevant listings.

U.S. Attorney Jamie MacDonald said using confidential information to trade derivatives is unlawful. MacDonald said the rules apply not only to traditional financial instruments but also to products including perpetual futures and tokenized securities.

The FBI said it would investigate cases in which individuals gain access to sensitive commercial information and use it for personal benefit.

Potential penalties

Chai and Xiang each face one count of violating the Commodity Exchange Act and one count of wire fraud. The Commodity Exchange Act charge carries a maximum prison sentence of 10 years, while the wire-fraud charge carries a maximum sentence of 20 years.

Those terms are the maximum potential penalties established by Congress. If the engineers are convicted, a court will determine their sentences.

In April 2026, the White House said abuse of public office was unacceptable after insider trades worth $580 million.

Source: Incrypted