Robinhood Engineers Face Fraud Charges Over Crypto Insider Trading

According to the U.S. Attorney’s Office for the Southern District of New York, Chai, 36, and Xiang, 30, used their access to Robinhood Crypto’s proprietary roadmap to place bets on Hyperliquid between 2025 and 2026. By opening perpetual futures positions before the company publicly announced new cryptocurrency listings, the engineers were able to profit as prices shifted following the official platform updates.

U.S. Attorney Jamie McDonald emphasized that the decentralized nature of Hyperliquid does not exempt the defendants from federal oversight. The charges serve as a warning that federal authorities are increasingly applying traditional financial crime statutes to derivative products and crypto-based instruments. While these trades were external to Robinhood’s own brokerage systems, the breach of fiduciary duty regarding corporate data remains the core of the government’s case.

Chai and Xiang each face a maximum of 10 years in prison for commodities fraud and up to 20 years for wire fraud. Both defendants are currently presumed innocent as the legal process moves forward in the Northern District of California and the Southern District of New York. The investigation highlights the growing scrutiny on internal data security at publicly traded firms that operate at the intersection of traditional finance and the decentralized crypto ecosystem.