Robinhood shares dropped more than 5% after prosecutors unsealed charges against two former engineers, alleging they used confidential information about upcoming crypto listings to trade ahead of public announcements.
Federal prosecutors say Hefu Chai and Huaisong Xiang each face one count of commodities fraud and one count of wire fraud. The Justice Department alleges they accessed nonpublic information about which tokens Robinhood planned to list, then bought perpetual futures tied to those tokens on Hyperliquid before the listings were announced.
Prosecutors say the conduct took place between 2025 and 2026, and that each defendant made more than $50,000. Court papers also say Robinhood treated that listing information as commercially sensitive and subject to internal confidentiality rules.
Hyperliquid is not accused of wrongdoing. For investors, the immediate focus is the more than 5% drop in Robinhood shares after the charges became public.