Overview
- The U.S. Attorney’s Office for the Southern District of New York announced the charges Tuesday, accusing Hefu Chai and Huaisong Xiang of one count each of commodities fraud and wire fraud.
- Prosecutors allege the engineers used nonpublic Robinhood Crypto listing schedules between 2025 and 2026 to open perpetual-futures positions on the Hyperliquid protocol and closed those positions after public listings moved token prices.
- Each defendant is accused of earning more than $50,000 from the trades and faces statutory maximums of up to 10 years for commodities fraud and up to 20 years for wire fraud, though the complaints are allegations and sentencing will depend on a conviction and federal guidelines.
- Federal authorities, led by the FBI, stressed that using a decentralized derivatives venue does not remove legal obligations to protect employer confidential information and the two have scheduled initial appearances in separate federal districts.
- The case arrives as Robinhood expands blockchain products, including a July mainnet launch, and could sharpen regulatory and corporate controls over who can access token listing plans and how that access is monitored.