China Orders Two-Year Wind-Down of Tiger, Futu and Longbridge

China’s securities regulator ordered a two-year wind-down of the mainland operations of Tiger Brokers, Futu and Longbridge, immediately blocking new deposits and buy orders and allowing only sell-and-withdraw activity during the wind-down period. The regulator said it will seek to confiscate illegal gains and impose penalties under law.

The China Securities Regulatory Commission named Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited and Changqiao/Longbridge Securities (Hong Kong) Limited in the enforcement action. The agency said the firms handled trading orders, public fund sales and futures brokerage for mainland customers without the required Chinese licenses and violated the Securities Law, the Securities Investment Fund Law and the Futures and Derivatives Law.

Under the regulator’s timetable, the block on new deposits and buy orders takes effect immediately. Existing mainland clients can sell positions and withdraw funds during the two-year wind-down. At the end of that period, the firms must take China-facing websites, apps and servers offline. The affected brokers retain the right to request a hearing before final penalties are imposed.

Shares of Futu and Tiger declined after the announcement as investors reassessed revenue exposure tied to mainland client bases. Market volatility followed as traders priced in the potential loss of client activity in China.

Analysts and market participants noted that some mainland retail investors used these platforms to access U.S. and other foreign markets because they offered lower-cost, faster onboarding than formal channels. Mainland residents face an annual foreign-exchange quota of roughly $50,000 for legal transfers, which limits direct offshore investment through official banking routes.

With deposits and buy orders blocked on the affected platforms, some investors are expected to seek alternative channels to reach foreign assets. Over-the-counter crypto desks and peer-to-peer exchanges have been used by traders inside China to acquire dollar-pegged stablecoins and other crypto assets, often accessing offshore services via virtual private networks.

Tether’s USDT has been a commonly used on-ramp in past episodes in which traders sought dollar exposure outside formal channels. At times OTC markets have priced USDT at a premium to the yuan.

Legal cross-border routes remain available. The Qualified Domestic Institutional Investor program, Cross-boundary Wealth Management Connect and the Hong Kong Stock Connect continue to let mainland investors buy foreign securities, but they carry strict quotas, higher fees and a narrower set of products compared with the mobile brokerage apps.

Regulators have tightened rules on private digital assets. In February 2026 the People’s Bank of China and the CSRC broadened enforcement to cover stablecoins and tokenization and targeted foreign issuers offering services to Chinese residents. Market participants cautioned that regulators could broaden enforcement if crypto or offshore channels are used to bypass Chinese rules.

Analyst Kyle Chasse observed, “Unlike traditional investments, bitcoin has no QDII/QFII limits.” The two-year wind-down window gives authorities time to monitor where displaced client funds move and to take further action under law.