Futu and UP Fintech's Tiger Brokers face a regulatory threat to their core mainland Chinese business. China's CSRC and seven other government departments launched a crackdown on illegal cross-border securities, futures and fund business, opening investigations and issuing advance penalty notices against Futu, Tiger Brokers and Longbridge. They are accused of providing brokerage, margin financing, fund sales and futures services to mainland investors without approval. x.com 

Futu and UP Fintech's Tiger Brokers face what should be unprecedented penalties that strip their onshore gains and clear out illegal existing business in mainland China. Regulators will confiscate all illegal gains of the onshore entities of Tiger, Futu and Longbridge and set a two-year concentrated rectification period to clear out illegal existing business. Neither is one to buy on the news. x.com  x.com 

Futu shows the regulatory risk of investing in China, which is why Sea and Grab, with little China exposure, are preferable. Futu fell 40% on a Chinese government investigation. Such episodes usually look scarier than they turn out, and Futu has been dealing with Beijing since 2021, so investors should not be surprised; the key is limiting exposure. x.com  x.com 

Webull faces a national-security overhang from its China ties. Per CNBC, citing House congressional panel findings, Webull's China ties are a national security risk, and the stock dropped 10%. The core problem is that Webull controls $25B of customer assets and allegedly routes retail data through a mainland development team. The CEO has sold 200k shares since late August, and other insiders have also been selling. x.com  x.com 

China's ban on offshore brokers serving mainland residents means a long-term liquidity drain for Chinese ADRs and Hong Kong stocks. Eight ministries jointly barred foreign institutions from cross-border securities services; existing users can only sell for two years before forced account closure, and Futu was fined up to 1.85 billion yuan. With mainland retail investors' route overseas sealed off, new money will find it increasingly hard to enter these markets. x.com 

China's crackdown on illegal cross-border brokers such as Tiger, Futu and Longbridge is milder for Hong Kong stocks than it looks, and likely positive longer term. Existing accounts can only sell for two years, so selling is gradual rather than a stampede, and legal channels like Stock Connect, QDII and Wealth Connect are untouched. Once old positions clear, that money should return via compliant southbound flows, adding liquidity. The hit falls mainly on the brokers' own shares. x.com 

UP Fintech's business is holding up despite regulatory pressure, and its stock is reclaiming its downtrend for the first time since February. Q1 revenue rose 26.3% to $154.9M even as China's CSRC imposed a roughly $59.7M penalty that sent shares down as much as 28%, and the board responded with a $50M buyback. Holding above the reclaimed descending trendline points to $6, about 20% upside; losing it means chop back into $4.50-5.00. x.com 

Chinese stocks are uninvestable for long-term investors because the value created goes to the Communist Party, not shareholders. The Chinese index is down 16% since 1991 while the S&P 500 rose 1,570% and the Nasdaq 3,440%, and Alibaba has gained just 27.8% in 12 years since its IPO. When companies grow too strong, the party hits them with megafines, sidelines founders like Jack Ma or blocks game releases as at Tencent, and foreign investors own only VIE contracts, not shares. x.com  x.com  x.com  … Show more

UP Fintech is clearly mispriced: at about 4.3 times EV to owner free cash flow, the market prices in zero growth after an outstanding 2025. Revenue rose 56% to $612 million, net income jumped 181% to $171 million for a 28% margin, and cash doubled to $793 million. A risk is that management holds net cash near 60% of enterprise value without a clear capital allocation plan. x.com  x.com 

Meta is a better buy than Tencent because it carries no China risk and offers more than twice the growth, even with Tencent at 15 times earnings. x.com