Futu and Tiger Brokers plunge 40% pre-market! China drops "nuclear-level" regulation: Mainland clients prohibited from buying, only allowed to sell effective immediately.

The "doomsday" for Chinese cross-border brokerage firms has arrived! The CSRC issued a bombshell regulatory measure today (22nd), accusing Futu, Tiger Brokers, and Longbridge of operating cross-border businesses illegally and announcing the confiscation of all illicit gains. Even more devastatingly, the authorities have ordered an immediate cutoff of capital inflows from the mainland. Existing clients now face a "sell-only, no-buy" predicament, and the platforms will be completely shut down in two years. Panic erupted instantly on Wall Street, with both FUTU and TIGR shares plummeting nearly 40% in pre-market trading. (Previous coverage: Breaking: CSRC plans to confiscate "all domestic and offshore illicit gains" from Tiger, Futu, and Longbridge) (Background: Futu's Cheetah Exchange achieves "brokerage + crypto" dual-license platform, to promote cryptocurrency as margin) U.S.-listed Chinese brokerage stocks faced an unprecedented "darkest hour" today (May 22, 2026). Triggered by the devastating new regulatory policy released by Chinese authorities, panic selling broke out before the Wall Street market opened. According to the latest pre-market trading data, the share prices of the two major cross-border brokerage giants were decimated: - Futu Holdings (FUTU): Plunged from the previous closing price of $123.86 to a range of $75.5 to $77.7 in pre-market trading, a staggering drop of -37% to -39%. - Tiger Brokers (TIGR): Shares plummeted from $5.84 to around $3.7, with a similar decline of -36% to -37%. Pre-market trading volume for both stocks surged significantly, indicating that a large amount of capital is fleeing at any cost. The "nuclear bomb" that triggered this market crash was the heavy administrative penalty issued today by the CSRC in conjunction with multiple departments. The CSRC stated that entities including Futu Securities International (Hong Kong), Tiger Brokers (New Zealand), and Longbridge (Hong Kong) have been "illegally operating" securities and futures businesses—including brokerage, margin financing, and fund sales—within China without approval, severely disrupting market order. Consequently, the authorities decided to impose the harshest sanctions: planning to confiscate all illicit gains from these entities and imposing additional heavy fines in accordance with the law. The authorities have officially opened an investigation and issued a pre-penalty notice. For these brokerages, which are highly dependent on mainland Chinese users, the truly fatal blow lies in the official two-stage "cleansing plan" for "existing clients": - Immediate "one-way cutoff": A total ban on providing "buy" or "deposit" services to existing mainland investors. In other words, mainland investors' accounts have instantly become one-way exits where they can "only sell stocks and withdraw funds." - "Total shutdown" in two years: The authorities have provided a transition period of approximately two years for centralized rectification. Once the deadline expires, domestic websites, trading apps, and supporting servers will be forcibly shut down, completely severing trading channels for mainland users. Market analysts point out that this move is not only intended to regulate the securities market but is also a heavy blow dealt by the Chinese government to strictly prevent "capital flight." In fact, there were early signs of this storm. As early as the end of 2022, the CSRC had already defined such businesses as illegal and demanded a halt to new mainland client acquisitions. Today's move marks an escalation from "demanding rectification" to "substantive penalties and liquidation." Facing an existential crisis, both companies rushed to address the situation today. Futu responded by stating it would actively embrace regulatory guidance, emphasizing that it had previously stopped accepting new mainland accounts, that the proportion of mainland clients has dropped significantly, and that it will strictly push forward with compliance rectification. Tiger Brokers also issued a statement emphasizing "compliance first," stating that its overseas operations are running normally and that it will fully cooperate with regulatory requirements. However, judging by the pre-market stock price collapse, the capital market has clearly voted with its feet. With the mainland, its largest "gold mine," completely sealed off, Futu and Tiger will have to seek difficult transformations and survival in the highly competitive Hong Kong and overseas markets.