Former Robinhood Engineers Charged In Crypto Listing Front-Running Case

Two former Robinhood (NASDAQ: HOOD) engineers have been charged in federal court with using confidential company information about upcoming cryptocurrency listings to place trades on a separate derivatives platform, prosecutors said this week.

The US Attorney’s Office for the Southern District of New York (SDNY) unsealed criminal complaints against Hefu Chai, 36, of Menlo Park, California, and Huaisong Xiang, also known as Jerry Xiang, 30, of Jersey City, New Jersey. Each is accused of commodities fraud under the Commodity Exchange Act and of wire fraud.

The commodities count carries a statutory maximum of 10 years in prison; the wire-fraud count carries a maximum of 20 years.

The charges are allegations, and both men are presumed innocent unless proven guilty.

According to the complaints, Chai and Xiang worked as engineers at Robinhood Markets.

Their jobs gave them access to nonpublic details about whether and when Robinhood Crypto, the firm’s digital asset platform, would add new tokens.

Company policy treated employees with that access as “Coin Aware Individuals” and barred them from trading the relevant assets on Robinhood or any other venue before a listing or delisting announcement and for 24 hours afterward.