Two Former Robinhood Engineers Charged by US Prosecutors in Crypto Front-Running Case

Two former Robinhood engineers have been charged by U.S. prosecutors with using advance knowledge of crypto listings to trade perpetual futures.

The Block reported on September 15 that federal prosecutors in the Southern District of New York charged former Robinhood engineers Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud.

Prosecutors allege the two misappropriated nonpublic information on upcoming token listings at Robinhood Crypto and used it to trade perpetual futures on those tokens on Hyperliquid. From 2025 to 2026, they allegedly repeatedly built positions ahead of Robinhood's official listing announcements and made more than $50,000 each.

Jamie McDonald, the U.S. attorney for the Southern District of New York, said it is illegal to misuse confidential information to trade derivatives for personal gain. Using instruments such as perpetual futures or tokenized securities does not allow insiders to evade the law.

Chai and Xiang were each charged with one count under the Commodity Exchange Act and one count of wire fraud. The commodities fraud charge carries a maximum prison sentence of 10 years, while the wire fraud charge carries a maximum of 20 years.

Robinhood said it launched an internal investigation as soon as it became aware of the matter and reported it to law enforcement and regulators. The company said it takes market integrity seriously, applies a zero-tolerance policy to insider trading, and will continue cooperating with the investigation.

The Block said the case is similar to the 2022 insider-trading case involving nonpublic Coinbase listing information, though the trading method differed. In that case, the defendants allegedly traded the tokens due to be listed. In this case, prosecutors allege the defendants used nonpublic listing information to trade perpetual futures.