Federal authorities are charging two former engineers at a major brokerage with misusing secret company information to trade cryptocurrency derivatives ahead of public announcements.
The U.S. Department of Justice says the pair accessed nonpublic details about which tokens Robinhood Crypto planned to list and then bought perpetual futures on the decentralized exchange Hyperliquid before those listings became public.
Prosecutors allege the defendants breached confidentiality duties owed to their employer while trading between 2025 and 2026.
Each defendant profited more than $50,000 from the trades.
Says U.S. Attorney Jamie McDonald,
“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal.
That is exactly what we allege Hefu Chai and Huaisong Xiang have done. Today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments.”
The men face one count each of violating the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison, and wire fraud, which carries a maximum sentence of 20 years in prison.
Robinhood cooperated with the investigation.
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