Topline
Robinhood shares fell more than 5% on Wednesday to hit a two-week low after two employees from the trading platform were charged with fraudulent crypto trading that prosecutors say netted 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 fell over 5.3% to $104.59 shortly before 2:30 p.m. EDT, marking a two-week low for the company’s shares as they have fallen from an eight-month high recorded in early September.
Hefu Chai, 36, and Huaisong Xiang, 30, were charged by the Justice Department on Tuesday with fraud for allegedly making crypto transactions based on confidential information.
Prosecutors claim Chai and Xiang used private knowledge of token launches to trade “perpetual futures” and earn profits on memecoins and a decentralized exchange known as Hyperliquid.
The two employees were designated as “Coin Aware Individuals” at Robinhood, meaning they were barred 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 against him, with Robinhood confirming to Forbes it investigated and reported the matter 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 around the $115 mark. Despite a turbulent 2026, the stock has risen about 177% since the company went public in 2021 and navigated 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 against him and later sentenced to 25 years in prison.
Further Reading
Two Robinhood Employees Charged With Crypto Trading Fraud (Forbes)
Leave a comment