NEW YORK — Between 2025 and 2026, Chai and Xiang bought perpetual futures on Hyperliquid ahead of Robinhood's public listing announcements for specific cryptocurrency tokens. Chai and Xiang each profited more than $50,000 from the trading scheme. Hefu Chai and Huaisong Xiang were employed as engineers at Robinhood Markets, Inc. Assistant U.S. Attorney Alexandra N. Rothman is in charge of the prosecution.

FBI Assistant Director in Charge James C. Barnacle, Jr. said Hefu Chai and Huaisong Xiang are charged with commodities fraud and wire fraud for allegedly exploiting confidential business information taken from their employer to trade perpetual futures.

Xiang faces a maximum sentence of 10 years for violating the Commodity Exchange Act and 20 years for wire fraud. Chai will be presented in the Northern District of California. Xiang will be presented before U.S. Magistrate Judge Ona T. Wang.

Why It Matters

The case illustrates how federal authorities are applying traditional securities and commodities fraud statutes to trading activities involving digital assets and decentralized exchanges. By charging the defendants with wire fraud and violations of the Commodity Exchange Act, prosecutors signaled that misappropriating confidential corporate information for trading in derivatives markets remains illegal regardless of the financial instrument used.

The announcement clarifies that corporate insiders cannot use novel financial structures, such as perpetual futures or tokenized securities, to bypass existing legal frameworks. The potential sentences reflect the seriousness with which regulators view the misuse of non-public information in these emerging markets.

Timeline

On September 15, 2026, the United States Attorney for the Southern District of New York and the FBI announced the unsealing of complaints charging Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud. Also on September 15, 2026, FBI Assistant Director in Charge James C. Barnacle, Jr. stated that Hefu Chai and Huaisong Xiang are charged with commodities fraud and wire fraud for allegedly exploiting confidential business information taken from their employer to trade perpetual futures. U.S. Attorney Jamie McDonald said on September 15, 2026, that today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments.

McDonald also stated on September 15, 2026, that misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. On September 15, 2026, it was announced that Chai will be presented in the Northern District of California and Xiang will be presented before U.S. Magistrate Judge Ona T. Wang.

What's New

Additional reporting indicates that the U.S. Attorney for the Southern District of New York, Jamie McDonald, stated that Hefu Chai and Huaisong Xiang each made more than $50,000 in profits from trading on Hyperliquid using confidential information from Robinhood. A sealed complaint filed by the U.S. Attorney's Office for the Southern District of New York states that HEFU CHAI earned more than $50,000 in illicit profits from trading on Hyperliquid. Further details reveal that Hefu Chai is 36 years old and Huaisong Xiang is 30 years old.

Reports also note that HUAISONG XIANG is due before Magistrate Judge Ona T. Wang in Manhattan. Contextual information identifies Hyperliquid as a decentralized cryptocurrency exchange.

How Sources Differ

Sources differ on the details regarding the southern district. Justice.gov states that HEFU CHAI earned more than $50,000 in illicit profits from trading on Hyperliquid, according to a sealed complaint filed by the U.S. Attorney's Office for the Southern District of New York. The U.S. Attorney's Office for the Southern District of New York Press Release 26-26 states that the United States Attorney for the Southern District of New York and the FBI announced the unsealing of complaints charging Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud.

Sources also differ on details regarding Huaisong Xiang. The U.S. Attorney's Office for the Southern District of New York Complaint states that Hefu Chai and Huaisong Xiang were employed as engineers at Robinhood Markets, Inc. Newsdata reports that Hefu Chai is 36 years old and Huaisong Xiang is 30 years old.

Sources differ on the handling of confidential information. U.S. Attorney Jamie McDonald stated that misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal.