China Fines Tiger Brokers and Futu Billions in Cross-Border Crackdown
China’s securities regulator has announced severe penalties against three cross-border brokerages — Tiger Brokers, Futu Securities, and Changqiao Securities — for operating illegally within the country, in a landmark enforcement action that caps a two-year regulatory campaign. The China Securities Regulatory Commission (CSRC) said it plans to confiscate all illegal gains from the companies’ domestic and overseas entities and impose substantial fines, according to Xinhua News Agency.
The Penalties
The fines are staggering. Futu Holdings faces a proposed penalty of 18.5 billion RMB (approximately $2.71 billion USD), while its founder and CEO Li Hua has been personally fined 1.25 million RMB. Tiger Brokers received a combined penalty of approximately 411.2 million RMB ($56.3 million USD), comprising a 308.1 million RMB administrative fine and confiscation of 103.1 million RMB in illegal gains, as reported by 21 Economic News. Tiger’s CEO Wu Tianhua was also issued a warning and fined 1.25 million RMB. Changqiao Securities faces full confiscation of all illegal gains, though the specific amount has not been publicly disclosed.
Market Reaction
The announcement triggered a dramatic sell-off. Tiger Brokers’ stock plunged approximately 45% in pre-market trading on the Nasdaq, while Futu Holdings fell more than 30%, according to Phoenix Finance. The sharp declines reflected investor shock at the severity of the penalties, which far exceeded market expectations.
Regulatory Framework
The penalties are part of a comprehensive action plan approved by the State Council and jointly issued by eight government departments, including the CSRC, the Ministry of Industry and Information Technology (MIIT), and the Ministry of Public Security. According to Lianhe Zaobao, the plan establishes a two-year concentrated rectification period to eliminate illegal cross-border operations entirely.
Background: A Multi-Year Crackdown
The CSRC’s action represents the culmination of a regulatory process that began in December 2022, when the regulator first notified Futu and Tiger Brokers that their cross-border operations were illegal. In January 2023, the Securities Brokerage Business Management Measures codified the prohibition. By May 2023, both companies had removed their trading apps from mainland China app stores and stopped accepting new mainland account applications.
During the two-year rectification period that followed, existing mainland investors were allowed to continue trading but restricted from transferring new funds. The current penalties mark a significant escalation, moving from warnings and operational restrictions to aggressive financial sanctions.
Company Responses
Both companies have indicated they will comply with the regulatory decisions. Tiger Brokers stated that it “sincerely accepts the penalty decision” and is “fully cooperating with the regulatory authorities.” The company noted that mainland China client assets account for approximately 10% of its global total as of the first quarter of 2026, and that its international operations remain normal.
Futu Holdings similarly said it “actively embraces and responds to the guidance direction of regulators in both regions,” adding that it will strictly follow regulatory requirements to advance compliance work. The company reported that mainland Chinese clients with assets now represent 13% of its total client base, down from higher levels before the crackdown began.
Broader Implications
The multi-agency approach — involving law enforcement and technology regulators alongside securities authorities — signals the seriousness with which Beijing views unlicensed cross-border financial services. The crackdown aligns with China’s broader financial regulatory tightening, including capital controls to prevent capital flight, efforts to channel domestic savings into onshore markets, and data sovereignty concerns.
For the millions of mainland Chinese investors who use these platforms, existing accounts remain operational for now, but the two-year rectification plan ultimately requires all services for mainland investors to cease. Investors will need to find alternative channels or repatriate their funds.
Hong Kong SFC Coordination
On the same day, the Hong Kong Securities and Futures Commission (SFC) issued a circular addressing account opening procedures after reviewing 12 securities brokerage firms. The SFC identified “significant deficiencies” including inadequate due diligence and acceptance of suspicious documents, suggesting close coordination between mainland and Hong Kong regulators.
What’s Next
The announced penalties are still “proposed,” meaning the final amounts may change after the companies exercise their rights to statement, defense, and hearing. Industry observers will be watching closely to see whether other cross-border brokerages, such as SogoTrade and Webull, face similar scrutiny. The case represents a defining moment for China’s approach to regulating the cross-border financial services industry and could reshape the landscape for Chinese investors seeking overseas market access.