Overview
- Federal prosecutors unsealed criminal complaints on Sept. 15 that charge Hefu Chai and Huaisong Xiang with one count each of commodities fraud and one count of wire fraud for trading on advance listing information.
- Prosecutors allege the engineers used 'Coin Aware' access to a private Robinhood Slack channel and violated a company rule that barred trading 24 hours before and after token listings.
- The complaints say the men placed leveraged perpetual-futures positions on the decentralized exchange Hyperliquid before public listings between 2025 and 2026 and each realized more than $50,000 in gains.
- Each defendant faces a maximum statutory penalty of 10 years for the Commodity Exchange Act charge and 20 years for wire fraud and were scheduled for arraignments in separate federal districts with Robinhood cooperating in the probe.
- The case extends earlier crypto enforcement by applying traditional commodities and fraud laws to on-chain derivative trading and raises questions about broker controls, monitoring of external venues, and how firms protect listing information.