Topline
Robinhood shares dropped more than 5% on Wednesday, hitting a two-week low, after two employees at the trading platform were charged with crypto insider trading that prosecutors say earned each of them over $50,000.
The charges against the Robinhood employees were filed Tuesday.
Photo illustration by Cheng Xin/Getty Images
Key Facts
Robinhood’s stock slid over 5.3% to $104.59 shortly before 2:30 p.m. EDT, marking a two-week low as shares have declined from an eight-month high set in early September.
Hefu Chai, 36, and Huaisong Xiang, 30, were charged Tuesday by the Justice Department with fraud for allegedly conducting crypto transactions based on confidential information.
Prosecutors allege Chai and Xiang leveraged private knowledge of token launches to trade “perpetual futures” and profit from memecoins on a decentralized exchange called Hyperliquid.
Both employees were classified as “Coin Aware Individuals” at Robinhood, meaning they were prohibited from trading on Robinhood or other platforms “prior to and during the 24 hours after Robinhood publicly announces a new listing or delisting on Robinhood Crypto.”
An attorney for Xiang told Forbes the employee denied the charges, while Robinhood confirmed to Forbes that it investigated the matter and reported it to regulators.
Big Number
6.7%. That is how far Robinhood shares have fallen since the start of the year, when the platform’s stock traded near the $115 mark. Despite a turbulent 2026, the stock has risen roughly 177% since the company went public in 2021 and endured over three years of stagnation below the $25 mark.
Key Background
Chai and Xiang’s charges mark the latest crypto insider trading controversy since 2020. In 2023, former Coinbase product manager Ishan Wahi was sentenced to two years in prison for insider trading that generated about $1.5 million in illicit gains. Cryptocurrency financial services firm Gotbit and its founder Aleksei Andriunin were convicted last year, with Andriunin sentenced to eight months in prison after pleading guilty to federal wire fraud and market manipulation charges. Andriunin and Wahi’s convictions pale in comparison to FTX founder Sam Bankman-Fried’s conviction in 2023, when he was found guilty on all seven criminal counts of fraud and conspiracy and later sentenced to 25 years in prison.
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