HOOD Stock Extends Slide Overnight: Ex-Employees Face Crypto Insider Trading Charges

• Chai and Xiang allegedly each profited more than $50,000 from their illicit trading.

• U.S. prosecutors charged Chai and Xiang with one count each of violating the Commodity Exchange Act.

• Meanwhile, HOOD stock fell more than 3% at close on Tuesday and continued to decline in the overnight session after the CLARITY Act failed to advance in the Senate.

Two former employees of Robinhood Markets Inc. (HOOD) were charged with fraud for using confidential insider information to trade cryptocurrency-linked perpetual futures, as per a statement from the U.S. Attorney's Office, Southern District of New York.

The engineers, Hefu Chai, 36, and Huaisong Xiang, 30, allegedly purchased perpetual futures tokens on Hyperliquid, a decentralized exchange, between 2025 and 2026 ahead of the company's public announcements that the underlying cryptocurrency tokens would be listed on Robinhood Crypto.

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Robinhood did not immediately respond to a request for comment from Stocktwits on the allegations.

What Are The Allegations Against The HOOD Employees?

U.S. Attorney for the Southern District of New York Jamie McDonald and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation James C. Barnacle, Jr., charged Chai and Xiang with one count each of violating the Commodity Exchange Act.