Examining Webull's China Links

A new bipartisan investigation by the Select Committee on China, led by Chairman John Moolenaar (R-MI) and Ranking Member Ro Khanna (D-CA), finds that stock brokerage Webull Financial has not been transparent about its links to China. In addition to finding that the company’s practices exposed American investors’ data to surveillance risks in China, the investigation also documents how the company is controlled by China-linked executives and its China-based subsidiary receives subsidies and cash rewards from Chinese government authorities.

"Webull’s China-based operations put American investors and their data at risk. China’s national security law compels all Chinese citizens to comply with demands for information from the CCP, and a stock brokerage storing data in China is no different,” said Moolenaar. "Using technology providers in mainland China and an opaque China-linked ownership structure, Webull exposes its data to our foremost adversary. Investors should heed this information when choosing who they do business with.”

“Whether it’s this trading app or other brokerage apps, custodians of Americans’ financial data and savings should strive for transparency with the customers they serve. Webull should be forthright about its connections to the PRC, rather than seemingly seeking to minimize them,” Khanna said.

The report titled, Free Trades, Hidden Ties: Exposing Webull’s China Links, makes six findings:

1.      Webull’s data practices expose American investors to PRC legal and surveillance risk.

2.     Webull misrepresented where key employees worked and how they were supervised.

3.     Webull’s governance is dominated by PRC-linked control.

4.     Webull’s regulatory controls were weaker than its assurances suggested.

5.     Webull’s subsidiary accepted PRC government funding conditional on CCP loyalty while its affiliates expanded in China.

6.     Webull’s clearing and custody safeguards are concerning.

Policy Recommendations

The investigation also makes five policy recommendations as a result of its findings:

1.      Codify the Securities and Exchange Commission Cross-Border Task Force.

2.     Enact Inspectability Requirements for Broker-Dealer Operations — a Holding Foreign Companies Accountable Act for Broker-Dealers.

3.     Create Foreign-Adversary Data Protections for Brokerage Records.

4.     Regulate Conflicted Clearing and Self-Custody Arrangements.

5.     Bring Foreign-Controlled Broker-Dealers Within Committee on Foreign Investment in the United States (CFIUS) Jurisdiction.

Background

Webull is a stock trading platform that operates in the U.S. and purports to be an ordinary American broker-dealer; in reality, Webull's corporate and technology framework is tied directly to China, and the company has routinely distorted the facts about its personnel and operations. 

In 2024, Moolenaar and then-Ranking Member Raja Krishnamoorthi (D-IL) sent a letter to Webull regarding Webull's troubling ties to China and the risks those ties may pose to the security of American user data.

In the 2024 letter, the lawmakers described that while operating in the United States, Webull has retained close ties to a network of Chinese technology companies, particularly Fumi Technology and Hunan Weibu. Webull has not only entered technology-sharing agreements with these companies but also shares personnel with them. Additionally, Webull entities enjoy grants from the Chinese Communist Party that flow through Webull's Chinese sister company, Hunan Weibu, intended to support Webull's operations abroad. The lawmakers expressed that these entities, and related links to the Chinese Communist Party, raise concerns about Webull’s independence, the security of U.S. investor data, and its ability to comply with U.S. financial regulations.

Read the full report here.