Robinhood Employees Charged For Allegedly Using 'Confidential Business Information' to Trade Crypto Futur

The Department of Justice charged two former engineers from Robinhood Markets, Inc. (NASDAQ:HOOD) on Tuesday in connection with an alleged insider trading scheme involving cryptocurrencies.

Confidential Information Misused, Says Regulator

Hefu Chai and Huaisong Xiang have been indicted on commodities fraud and wire fraud. Prosecutors allege that the two misappropriated Robinhood’s “confidential business information” and used it to take positions in perpetual futures on Hyperliquid (CRYPTO: HYPE) ahead of public announcements.

The two former employees had access to information regarding Robinhood’s plans to support additional cryptocurrencies on its subsidiary, Robinhood Crypto.

Between 2025 and 2026, Chai and Xiang allegedly used this information to buy perpetual futures linked to those tokens, violating Robinhood’s confidentiality obligations. Each of them allegedly made over $50,000 from these trades.

Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal," said Jamie McDonald, U.S. Attorney for the Southern District of New York.

McDonald thanked Robinhood for its cooperation with the investigation.

Robinhood didn’t immediately return Benzinga’s request for comment. A response from the Hyperliquid Policy Center is also awaited.