US lawmakers raise concerns over Webull's ties to China, demand data on security risks
Dec 08, 2024
Washington DC [US], December 8 : Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the US House Select Committee on the Chinese Communist Party (CCP) have raised significant concerns about Webull Financial LLC's ownership structure and operational ties to China . Due to these connections, the lawmakers highlighted the security risks posed to American investors' data and the broader US financial market.
In their letter, the Committee underscored that Webull, which plans to go public via a merger with the SPAC SK Growth Opportunities Corp., continues to maintain substantial links with Chinese entities.
These include ties to Webull's parent company, Fumi Technology, and Changsha-based Hunan Weibu Information Technology Co., which has received CCP-backed funding and shares personnel and technology with Webull. The lawmakers raised concerns about Webull's compliance with US regulations, especially regarding market fairness, transparency, and data security.
Despite Webull's restructuring to create the appearance of separation from the PRC, the company remains deeply intertwined with Chinese entities, raising serious questions about its independence and its ability to safeguard US user data.
This is particularly concerning given China's stringent laws requiring companies to cooperate with state intelligence activities. Additionally, the Committee pointed to Webull's recent move to Florida and the de-registration of brokers based in China, questioning the timing of these changes ahead of the planned SPAC deal.
Further concerns were raised about potential discrepancies in Webull's compliance with US regulations, specifically in the SEC's Rule 606 order routing data, which could indicate market manipulation or omissions in reporting.
In light of these risks, the Select Committee has demanded comprehensive documentation from Webull, including information on its efforts to ensure operational autonomy from the Chinese government, its data privacy practices, and its plans to protect the liquidity and security of U.S. investors' capital.
The Committee has set a deadline of December 31, 2024, for Webull to respond to these inquiries. The Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party has the authority to investigate and provide policy recommendations on issues related to the CCP's economic, technological, and security activities, especially as they impact american interests. As of the time of this report, Webull has not publicly responded to the letter.
