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Menlo Park resident and Robinhood engineer Hefu Chai was arrested Tuesday on commodities fraud and wire fraud charges, the U.S. Department of Justice announced.
Chai, 36, and fellow engineer Huaisong “Jerry” Xiang, 30, are accused of using confidential information obtained through their work at Robinhood to trade cryptocurrency-linked futures contracts on Hyperliquid.
From March 2025 through February 2026, prosecutors allege, the pair bought futures contracts before Robinhood publicly announced it would add certain cryptocurrencies to its platform. Those announcements typically drove up the cryptocurrencies’ prices, according to a recently unsealed indictment.
Chai and Xiang allegedly made more than $50,000 in profits from the trades, the DOJ said in a news release.
“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal,” U.S. Attorney for the Southern District of New York Jamie McDonald said in a news release. “That is exactly what we allege Hefu Chai and Huaisong Xiang have done. 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.”
Both defendants are scheduled to be arraigned Wednesday, Sept. 16, Chai in the Northern District of California, and Xiang — a New Jersey resident — in the Southern District of New York, the Justice Department said.
Each man faces a maximum sentence of 30 years in prison if convicted.
As part of his role at Robinhood, Chai was responsible for listing new cryptocurrencies. He was among a select group of employees with access to a confidential Slack channel that disclosed when cryptocurrencies would be added to the platform, prosecutors said.
Robinhood and its subsidiary, Robinhood Crypto, are headquartered at the former Sunset Magazine offices in Menlo Park. Together, the companies are Menlo Park’s third-largest employer, behind Meta and Snowflake.
“Robinhood takes market integrity seriously and has zero tolerance for insider trading. We have robust insider trading policies and procedures in place, including for new crypto listings,” a Robinhood spokesperson said in a statement. “We immediately investigated and reported this matter to law enforcement and regulators, and will continue to cooperate with the investigations.”
FBI agents were seen Tuesday morning on the Menlo Park street where Chai lives, near Hillview Middle School. Menlo Park Police Department spokesperson Nicole Acker said the department had been notified that the FBI was conducting an operation in the city but was neither involved in it nor aware of its details.
Chai left Robinhood in May 2026, according to the indictment. A LinkedIn profile appearing to belong to Chai states that he began working at OpenAI in June 2026. Before joining Robinhood in 2021, Chai worked as an engineer at Meta for six years, beginning in 2015.
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