The China Securities Regulatory Commission (CSRC) has penalized Tiger Brokers, Futu Securities, and Longbridge Securities for illegally operating cross-border financial services aimed at mainland investors. The enforcement stems from a nine-agency implementation plan announced on May 25, targeting brokerages that dodged China's capital controls. Shares of the parent companies tumbled in premarket trading — Tiger Brokers' parent fell 10%, while Futu Holdings slid 5%.
The crackdown details
Under the plan, the brokerages face a two-year phase-out period ending February 2026. During that window, they cannot accept new buy orders or capital inflows from mainland clients. Only sell orders and withdrawals are allowed. By the February 2026 deadline, the firms must also shut down all mainland-targeted websites, trading apps, and servers. Any illegal gains will be confiscated, and the regulator can levy additional penalties under Chinese law.
How the crypto ban fits in
The enforcement builds on a broader policy framework from February 2026 that expanded China's existing crypto ban. That update explicitly outlawed stablecoins, real-world asset tokenization, and the issuance of offshore yuan-pegged stablecoins. The CSRC's current action uses that framework as its legal backbone. The message is clear: no offshore workaround is safe, whether it's a stock brokerage or a crypto platform.
What investors saw
The market didn't wait for details. Tiger Brokers' parent dropped 10% in premarket trading immediately after the announcement. Futu Holdings lost 5%. Both firms have long served Chinese investors looking to buy U.S. and Hong Kong stocks, but the regulatory noose has been tightening for years. The nine-agency coordination — spanning securities, banking, and foreign exchange regulators — suggests this isn't a one-off slap. It's a coordinated push.
For the affected brokerages, the next few months will be about winding down mainland-facing operations. The February 2026 deadline for a full shutdown isn't far off, and the confiscation of illegal gains adds financial sting. Whether any of the three firms pivot to serve only non-mainland clients — or challenge the ruling — remains an open question.
