{"id":582,"date":"2026-09-16T15:19:55","date_gmt":"2026-09-16T15:19:55","guid":{"rendered":"https:\/\/1stblock.info\/?p=582"},"modified":"2026-09-16T15:19:56","modified_gmt":"2026-09-16T15:19:56","slug":"two-former-robinhood-engineers-charged-with-insider-trading-on-hyperliquid","status":"publish","type":"post","link":"https:\/\/1stblock.info\/?p=582","title":{"rendered":"Two Former Robinhood Engineers Charged With Insider Trading on Hyperliquid"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Federal prosecutors in the Southern District of New York charged former <strong>Robinhood<\/strong> engineers Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud on September 16, alleging the pair used confidential token-listing information to trade perpetual futures on <strong>Hyperliquid<\/strong> ahead of public announcements. Each defendant allegedly profited more than <strong>$50,000<\/strong> from the scheme.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to the Department of Justice, Chai and Xiang held access to a private internal channel that tracked which cryptocurrencies Robinhood Crypto planned to list before the information went public. Prosecutors say Chai traded ahead of at least 10 listing announcements and Xiang ahead of at least 11, opening leveraged perpetual positions on Hyperliquid \u2014 a decentralized derivatives platform where contracts do not expire \u2014 and closing them once the listings moved token prices. Because the trades ran through a decentralized venue rather than the underlying spot tokens, the case tests whether US insider-trading law reaches leveraged, on-chain derivatives the same way it reaches traditional securities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">US Attorney Jamie McDonald said misappropriating confidential information to trade derivatives for personal benefit remains illegal <em>regardless of the instrument<\/em>, adding that corporate insiders cannot evade securities and commodities laws by routing trades through decentralized platforms. If convicted, Chai and Xiang face up to 10 years in prison on the commodities fraud charge and up to 20 years on the wire fraud charge.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A <strong>Robinhood<\/strong> spokesperson said the company has &#8220;zero tolerance for insider trading&#8221; and that it investigated the activity internally before reporting it to law enforcement and regulators. The case is notable for its evidentiary trail: because Hyperliquid records positions and timestamps on-chain, independent researchers had already flagged suspicious wallet activity ahead of Robinhood listing announcements months before Tuesday&#8217;s charges \u2014 a reminder that transparent order books can work against traders trying to hide a pattern.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The filing extends a broader enforcement trend already touching prediction markets and centralized-exchange listings, following a 2022 case that charged three people in what prosecutors called the first cryptocurrency insider-trading tipping scheme, tied to advance knowledge of Coinbase listings. Market reaction on the day was muted, with <strong>BTC<\/strong> trading near $75,800 amid broader softness tied to Fed rate expectations \u2014 the case is being read as a compliance and market-structure story rather than a price catalyst.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal prosecutors in the Southern District of New York charged former Robinhood engineers Hefu Chai and Huaisong Xiang<\/p>\n","protected":false},"author":2,"featured_media":151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[4,3],"tags":[],"class_list":["post-582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-altcoins","category-market"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=582"}],"version-history":[{"count":1,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/582\/revisions"}],"predecessor-version":[{"id":584,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/posts\/582\/revisions\/584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=\/wp\/v2\/media\/151"}],"wp:attachment":[{"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1stblock.info\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}