US Federal Prosecutors Charge Robinhood Staff Over Digital Asset Perpetual Front-Running

The U.S. Department of Justice has charged two Robinhood staff members with front-running digital asset perpetual contracts, alleging they used confidential information about upcoming token listings to trade on decentralized exchanges.

New York Southern Federal Prosecutors announced on April 16 (KST) that engineers Hefu Chai and Huaisong Xiang were indicted for commodity fraud and wire fraud related to digital asset perpetual front-running. This marks the first time U.S. prosecutors have criminally charged individuals specifically for perpetuating front-running in digital asset perpetual contracts.

The prosecution claims the employees exploited confidential information from Robinhood Chain regarding token listings, trading perpetuals on decentralized exchange Hyperliquid before public announcements. According to prosecutors, they repeatedly established positions ahead of listing announcements between 2025 and 2026, generating profits exceeding $50,000 (approximately KRW 68.15 million) each.

New York Southern Federal Prosecutor Jamie McDonald stated that using confidential information for derivative trading is illegal, emphasizing that internal corporate actors cannot evade securities and commodities laws by utilizing perpetual contracts or tokenized securities.