US federal prosecutors for the Southern District of New York (SDNY) charged two software engineers from Robinhood Markets on September 15, 2026. The two men, 36-year-old Hefu Chai and 30-year-old Huaisong Xiang, also known as Jerry Xiang, face multiple charges of alleged commodities fraud and wire fraud.
Court documents filed by prosecutors detail their illegal activities spanning from 2025 to 2026. As technical staff, the two suspects leveraged their positions to access upcoming crypto asset listing schedules within the Robinhood Crypto division. They used the leaked internal schedules to quickly open perpetual futures positions right before the company released official listing announcements to the public. This insider trading scheme allegedly netted more than $50,000 in profits for each engineer.
However, what made their operation particularly noteworthy was their trade execution route.
Why They Chose to Trade on Hyperliquid
Instead of using conventional exchanges, both defendants turned to Hyperliquid for their transactions. The decentralized derivatives platform focuses on offering perpetual futures, a type of futures contract with no expiration date. Chai and Xiang likely relied on the decentralized nature of the exchange without centralized intermediaries to keep their fund trails away from the company’s internal surveillance systems.
Ultimately, this evasion tactic still led to formal charges. Prosecutors emphasized that the actions of these two tech workers constituted an outright breach of their duty of confidentiality toward their employer. In the initial release documents, prosecutors did not disclose the specific list of crypto assets involved in the insider trading scheme.
Internal Risks of Fast-Growing Companies
Law enforcement stated that the case involving Chai and Xiang is separate from Robinhood’s regular business operations. The digital investment platform recently announced strong monthly performance, recording $17.5 billion in crypto trading volume throughout August 2026.
The contrast between massive customer transaction turnover and employee information theft highlights a real risk for rapidly expanding exchange platforms. As daily trading volumes grow, a company’s defense systems constantly face vulnerabilities from the very people who maintain its infrastructure. This ethical breach serves as a stark reminder for the crypto industry: data leak threats do not always come from external hackers, but can also emerge from the hands of internal technical staff.
Reported via crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
