T wo former Robinhood employees have been charged by the Department of Justice (DOJ) with fraud for making cryptocurrency trades based on confidential information.

Hefu Chai, 36, worked as a technical lead at Robinhood and was “responsible for the listing of new digital assets” on its crypto-trading platform, according to a complaint filed in the Southern District of New York. Huaisong Xiang, 30, was a Robinhood software engineer. Robinhood had designated both employees as “Coin Aware Individuals,” which meant they were explicitly prohibited “from trading on Robinhood or on any other platform prior to and during the 24 hours after Robinhood publicly announces a new listing or delisting on Robinhood Crypto.”

Throughout 2025 and 2026, according to the DOJ complaints against them, Chai and Xiang used their private knowledge of upcoming token launches to trade “perpetual futures” and earn profits on Hyperliquid , a decentralized exchange. (Perpetual futures are financial derivatives without an expiration date that let people bet on the price of an asset.) Chai and Xiang traded to-be-listed memecoins like hippo-themed “Moodeng” and cat-themed “Syrup.” Cryptocurrencies often rise in value when they launch at a new trading venue like Robinhood because the increased availability drives up demand. The DOJ says that Chai and Xiang earned more than $50,000 each from the illicit trades.

Chai didn’t immediately respond to Forbes’ requests for comment. Robert Stahl, a New Jersey attorney for Xiang, said in an email, “My client denies the charges and we will vigorously defend this matter in court.” A Robinhood spokesperson said the company “has zero tolerance for insider trading” and has “robust insider trading policies and procedures in place, including for new crypto listings. We immediately investigated and reported this matter to law enforcement and regulators.”

The allegations are the latest insider-trading controversy across the ballooning set of venues where U.S. residents can trade and gamble. In 2023, a Coinbase employee was sentenced to two years in prison after allegedly tipping off his brother and a friend about coin listings, according to the DOJ . A former employee of NFT platform OpenSea was charged with insider trading that same year.

In April 2026, a U.S. soldier was charged by the DOJ with making more than $400,000 on Polymarket by using classified information about an upcoming military operation to oust Venezuela’s president. Over the past year, numerous cases of insider trading on prediction-markets operators have prompted Polymarket and Kalshi to create stricter rules, such as Kalshi’s June announcement of new employment-verification features and tools to let whistleblowers report insider trading.