The U.S. Attorney’s Office for the Southern District of New York charged Hefu Chai, 36, of Menlo Park, California, and Huaisong “Jerry” Xiang, 30, of Jersey City, New Jersey, on 15 September. Each faces one count of commodities fraud, carrying a statutory maximum of 10 years in prison, and one count of wire fraud, carrying a maximum of 20 years.
- Federal prosecutors in New York charge two former Robinhood engineers with wire and commodities fraud over confidential token listing leaks.
- The defendants face maximum statutory sentences reaching 30 years after generating more than $50,000 each across multiple perpetual trades.
- Law enforcement targets decentralized exchange activity by tracking Hyperliquid perpetual contracts executed against centralized exchange listing schedules.
The Listing Lead Could See The Calendar
Chai worked at Robinhood from about 2021 until May 2026 and was a technical lead responsible for listing new digital assets on Robinhood Crypto, according to his complaint. Xiang worked at the company from about 2024 until September 2026 as a software engineer involved in new listings, according to his complaint.
Both were designated “Coin Aware Individuals,” a group with access to a private Slack channel where Robinhood shared information about upcoming listings. The company’s policy barred employees from trading financial instruments while holding material nonpublic information and prohibited Coin Aware Individuals from trading on Robinhood or elsewhere before and during the 24 hours after a public listing or delisting announcement, prosecutors said.
A May 2025 Slack message to Chai and others warned: “we’re T-1 from launch … The 24-hour trading halt for employees will be in place.”
The complaints say a token could become available on Robinhood Crypto typically up to an hour before the company publicly announced the listing. That gap appears repeatedly in the trades described by prosecutors.
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→ Submit a Press ReleaseMEW And MOODENG Trades
On 21 May 2025, Chai allegedly received a Slack message saying Robinhood would list MEW and MOODENG the next day. On 22 May, he opened long positions in perpetual futures tied to both tokens on Hyperliquid, according to the complaint.
Prosecutors say he closed his MOODENG positions after the token became available on Robinhood but before the public announcement. With MEW, he allegedly closed some positions before the token became available and others after it went live, but all before Robinhood publicly announced the listing. He made a profit on both trades, the complaint says.
The complaint describes at least 10 occasions between 2025 and January 2026 in which Chai allegedly bought long positions in crypto perpetuals before Robinhood publicly announced the related listings, including trades involving ASTER, XPL, HYPE, ENA and AERO.
Xiang’s POPCAT Trade
Xiang’s complaint points to a March 2025 POPCAT trade. On 10 March, he allegedly received a Slack message saying Robinhood was considering listing the meme token on 13 March. Two days later, he transferred about 18 ether, valued at roughly $34,000, to a Hyperliquid wallet.
Later on 12 March, prosecutors say Xiang received another Slack message stating that Robinhood would list POPCAT at 9 a.m. Eastern on 13 March. He opened long POPCAT perpetual positions on Hyperliquid on 13 March, then closed them after POPCAT became available on Robinhood but before the company publicly announced the listing, according to the complaint.
The same wallet was allegedly used for at least 10 other Hyperliquid trades between May 2025 and February 2026 involving tokens including MEW, MOODENG, ONDO and RENDER, the complaint says.
Robinhood Reported The Matter
U.S. Attorney Jamie McDonald said, “Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal.”
Robinhood said it has “zero tolerance for insider trading,” had investigated and reported the matter to law enforcement and regulators, and would continue cooperating with their investigations.
Robert Stahl, Xiang’s lawyer, told Forbes: “My client denies the charges and we will vigorously defend this matter in court.”
The charges are accusations, and both defendants are presumed innocent unless proven guilty. Chai was scheduled to appear in federal court in California on 15 September, while Xiang was scheduled to appear before U.S. Magistrate Judge Ona T. Wang in New York the same day.
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