Shares of the cryptocurrency trading platform Webull have fallen significantly, dropping nearly 76% since its special acquisition corporation debut early last year. This decline comes amidst heightened scrutiny over the company's alleged ties to China, detailed in a recent report by the bipartisan House Select Committee on China.
The committee's 23-page report, titled “Free Trades, Hidden Ties Exposing Webull’s China Links,” asserts that "Webull’s ownership architecture, technical workforce, technology infrastructure, cross-border data routing, corporate financing, and compliance frameworks are tied in structural ways to the People’s Republic of China."
Concerns have been mounting in Congress since at least 2023 regarding the potential for Webull, which serves 28 million users globally, to share sensitive American customer data with Chinese intelligence services. The company has consistently denied these allegations, stating that its American customer data is stored in the U.S. and is secure.
According to the report, Webull's founder, chairman, and CEO, Anquan Wang, is a Chinese national. Wang reportedly controls the company through a dual-class share structure that gives him 79.2% of the company's voting power, enabling him to influence major corporate decisions and director elections.
The committee highlighted that Webull's data practices could expose American investors to risks associated with Chinese legal and surveillance frameworks. These findings echo broader national security concerns that have escalated in recent years regarding Chinese influence and data security.
Following the report's release, Webull's shares dropped 19% on Wednesday, closing at $5.89. A Webull spokesperson expressed disappointment, stating that the report contained "significant inaccuracies and unsupported conclusions" and that the company had not been contacted by the committee for over 20 months prior to the report's publication. The spokesperson also reiterated that Webull's U.S. operations are headquartered in St. Petersburg, Florida, and New York City, with U.S. customer data stored domestically and access controlled by U.S. personnel. The company affirmed its willingness to address questions with transparency, similar to its interactions with the SEC and FINRA.
A spokesperson for the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party clarified that the report's concerns are not about where data is stored, but rather about who can access it and the systems used for processing.
The report outlined six key findings: Webull's data practices pose PRC legal and surveillance risks to American investors; the company misrepresented employee work locations and supervision; its governance is heavily influenced by PRC-linked control; its regulatory controls were weaker than assured; a subsidiary accepted PRC government funding tied to CCP loyalty; and its clearing and custody safeguards are a concern. The committee recommends extending "foreign adversary data protections to brokerage records."
These concerns draw parallels to the ongoing debates surrounding the short-video app TikTok, which faced similar scrutiny over potential data siphoning by the Chinese government for espionage purposes due to the PRC's control over companies operating within its borders. Concerns over identity theft and the CCP accessing user data have been central to discussions by both Republicans and Democrats regarding TikTok's future in the U.S. The report's findings also align with past U.S. efforts, such as those by former President Trump, to address national security risks associated with Chinese technology firms.