Did ‘insider’ secretly short Robinhood on Hyperliquid?

A pseudonymous researcher has posted a suspicious trade by a collection of Hyperliquid wallets that some crypto traders suspect of having a special relationship with Robinhood.

Continuing a pattern of curious trades, the “insider” opened a prescient short on Hyperliquid’s HOOD perpetual futures contracts — crypto derivatives that mimic the price of Robinhood’s common stock — mere hours before Robinhood’s scheduled first-quarter earnings release. 

After its disappointing earnings, shares of Robinhood’s stock fell sharply yesterday evening, rewarding the traders’ leveraged short in after-hours trading.

The trader(s) at the center of the allegations are wallets ending in 177D, bc7b, acf9, and their various sockpuppets. They first transacted on July 16, 2025, and have gained attention from various Hyperliquid commentators.

Critics claim that the trader gained advance knowledge of Robinhood’s earnings results this week, secretly opening a directional bet against the stock via crypto exchanges to avoid actual stock short-sales that might have exposed them to greater regulatory scrutiny.

Robinhood trading correlation versus causation

Thoroughly convinced of the accusation that correlation equals causation, a researcher posted a thread about wallets that were funded by Robinhood withdrawals that subsequently traded on Hyperliquid and MEXC wallets ahead of Robinhood-related listing announcements.

Even though funds for some of the wallets trace to Coinbase, the researcher emphasized Robinhood-derived withdrawals and Robinhood-related news to allege the “insider” and even “employee” frame which is now circulating on social media.

However, correlation doesn’t necessarily equal causation, and the bridge between suspicious trading and wallets actually belonging to a Robinhood employee relies on thin evidence.

SEC insider trading ban

Robinhood, like any public company, has a formal insider trading policy, outlined in the company’s SEC filings.

The policy prohibits covered persons from trading Robinhood securities on material, non-public information, and from holding derivatives tied to the company’s performance using such special information.

Covered persons include employees, contractors, agents, and family members.

Trading US stocks while in possession of material non-public information is generally prohibited, including by law in US statutes.

The company hasn’t publicly addressed the conclusory allegations on social media as of Tuesday evening. Neither have critics disclosed how their “employee” or “insider” designations were made beyond corollaries like a suspicious series of events that could have numerous, alternative explanations.

Yesterday, Robinhood reported Q1 revenue slightly below a consensus of Wall Street estimates. However, the damage to its stock price resulted from crypto revenue year-over-year, which collapsed 47%, indicating dimmer prospects for growth. 

As a result, shares closed sharply lower in Tuesday’s after-hours trading, closing at $74.41 by 8pm New York time after opening the day at $81.55.

HOOD opened today’s session even lower, at $72.30, down 11.3% in just 24 hours.

Protos reached out to Robinhood for comment but did not receive an immediate reply prior to publication.

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