China Cracks Down on Tiger Brokers and Futu as Crypto Channels Gain Attention

China’s securities regulator is intensifying its crackdown on offshore online brokerages serving mainland investors, targeting major platforms including Tiger Brokers, Futu Holdings, and Longbridge. The China Securities Regulatory Commission (CSRC) announced that the firms allegedly provided securities trading, futures brokerage, and fund sales services to mainland Chinese users without the required domestic licenses.

The affected companies, which operate mainly through Hong Kong and overseas entities, became popular among Chinese investors seeking affordable access to US and Hong Kong stock markets. Their easy-to-use mobile platforms allowed mainland traders to bypass many of China’s strict capital controls and invest in global equities.

Under the new regulatory action, existing mainland customers will only be allowed to sell holdings and withdraw funds during a two-year transition period. New deposits and purchase orders have already been suspended. Authorities also plan to confiscate illegal gains connected to the operations and impose heavy penalties on the firms involved.

The crackdown has sparked speculation that some Chinese investors could turn to cryptocurrency markets as alternative channels for moving capital offshore. Stablecoins such as USDT remain widely used in over-the-counter (OTC) and peer-to-peer (P2P) trading networks, especially among users seeking access to dollar-based assets. Analysts believe demand for crypto-related services may increase as traditional offshore brokerage options become more restricted.

Despite this shift, China continues to strengthen its anti-crypto policies. Earlier this year, regulators expanded enforcement measures targeting stablecoins, tokenization services, and foreign crypto platforms operating within mainland China. While legal investment programs such as QDII and Hong Kong Stock Connect remain available, they offer stricter quotas and fewer investment choices compared to platforms like Tiger Brokers and Futu.