NEW YORK – Shares of UP Fintech Holding Ltd (TIGR) tumbled more than 34% in premarket trading on Friday after China’s securities regulator announced a crackdown on the company’s Tiger Brokers unit and two other online brokerages for allegedly operating unlicensed cross-border securities businesses serving mainland Chinese investors.
The China Securities Regulatory Commission (CSRC) said Tiger Brokers, Futu Securities International and Longbridge Securities conducted securities marketing, handled trading instructions and provided related services in mainland China without regulatory approval. The regulator stated it plans to confiscate illegal gains and impose penalties, though it did not specify the amount of any fines.
UP Fintech’s American depositary shares were indicated at $3.83 in extended trading at 8:55 a.m. Eastern, down 34.47% from Thursday’s close of $5.84. The move comes ahead of the company’s first-quarter earnings report, scheduled for release before the U.S. market opens on June 2.
The CSRC’s action is part of a broader effort by Beijing to tighten control over capital outflows. According to a report by Xinhua, a two-year clean-up period will be implemented, during which existing investors will only be allowed to sell holdings and withdraw funds, not make new purchases or transfer in money. After that period, offshore firms must shut down domestic websites, trading software and related servers used for such services.
Tiger Brokers responded by stating that it stopped opening accounts for users identified as mainland China residents since 2023 and had suspended advertising and marketing aimed at those users. The company said mainland China client assets represented about 10% of the group’s global client assets at the end of the first quarter, and that global operations remained normal.
The crackdown also affected Futu, whose parent company UP Fintech saw its shares fall more than 30% in U.S. premarket trade. Futu said mainland investors accounted for 13% of its customer base at the end of the first quarter. The broader online brokerage sector was hit as well, with shares of other Chinese fintech firms also declining.
Analysts noted that the regulatory move could have significant implications for the industry. Gary Ng, senior economist for Asia Pacific at Natixis, told Reuters that the government wants outbound capital flows kept under its scrutiny. Steven Leung, director of institutional sales at UOB-Kay Hian in Hong Kong, said the steps could cool down some trading and speculative activity in Hong Kong.
Zhan Kai, a partner at Dacheng in Shanghai, described the penalties as “relatively lenient for now,” but warned that bigger fines or even criminal prosecution could not be ruled out, according to Reuters. The uncertainty surrounding the size of the financial penalty added to investor anxiety.
UP Fintech entered the selloff after a strong 2025, reporting full-year revenue of $612.1 million, up 56.3%, and net income attributable to ordinary shareholders of $170.9 million. Chairman and Chief Executive Wu Tianhua attributed the growth to the firm’s internationalization strategy.
While the premarket price is not a settled cash-session close, and the company says mainland client assets are a limited slice of global assets, the risk remains. If regulators broaden restrictions, customers move assets faster than expected, or penalties land above market assumptions, UP Fintech’s trading commissions, margin-financing income and wealth-management revenue could come under pressure. Nasdaq’s regular market was due to open at 9:30 a.m. Eastern, with U.S. markets closed on Monday for Memorial Day, leaving Friday’s session carrying most of the first price discovery before the long weekend.
