China has launched a major crackdown on overseas stock trading platforms operating inside the country, targeting some of the biggest brokers offering access to U.S. stocks for Chinese investors.
Meanwhile, Chinese regulators now plan to confiscate illegal profits and completely shut down unauthorized cross-border trading services within the next two years.
China Targets Major Overseas Trading Platforms
On May 22, the China Securities Regulatory Commission (CSRC) announced enforcement action against Tiger Brokers, Futu Holdings, and Longbridge Securities over what authorities described as illegal cross-border securities business activities.
According to regulators, the firms provided unauthorized services to mainland Chinese investors, including overseas stock trading, futures brokerage, account opening, public fund sales, and fund transfers.
Chinese authorities stated that the companies violated securities, fund, and futures laws while disrupting the country’s financial market order.
As part of the crackdown, the CSRC said it plans to confiscate all illegal gains earned by the companies both inside and outside China while also imposing additional penalties.
Two-Year Cleanup Period Begins
The crackdown follows a new joint regulatory plan issued by the CSRC alongside eight other government departments. The plan introduces a two-year “rectification period” aimed at completely eliminating illegal overseas trading services operating in mainland China.
During this transition period, overseas platforms will no longer be allowed to offer new account openings, trading access, or fund transfer services for mainland users.
Existing investors will only be allowed to sell positions and withdraw funds. After the two-year period ends, overseas firms must completely shut down Chinese websites, apps, servers, and trading systems tied to mainland investors.
Why China Is Tightening Controls?
Chinese regulators said overseas brokerages have spent years attracting mainland investors through apps, websites, local partnerships, and affiliates without official approval.
Authorities first warned about the illegality of these activities back in 2022 and previously restricted firms like Tiger Brokers and Futu from onboarding new Chinese users.
Now, regulators appear determined to fully remove unauthorized foreign trading channels from the domestic market.
What Could Happen Next?
Despite the aggressive crackdown, Chinese regulators stressed that investor assets will remain protected during the transition process.
The CSRC said firms must continue communicating with affected users and properly handle account closures and withdrawals. The restrictions could also create unexpected opportunities elsewhere.
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