Webull stock (BULL) dropped 19.1% to close at $5.89 on Wednesday after the House Select Committee on China issued a report alleging that customer data on the retail trading platform may remain exposed to Chinese intelligence laws.
Key Takeaways
- Stock Impact: Webull (BULL) plunged 19.1% to close at $5.89 following security allegations from US lawmakers.
- Ownership & Staffing: Founder Anquan Wang, a Chinese citizen, controls 79.2% of voting power, while 863 employees (62% of total staff) work at China subsidiary Hunan Weibu.
- Customer Holdings: The platform holds $24.6 billion across roughly 28 million users globally.
- Company Defense: Webull denied the allegations, stating US user data is stored and managed within the United States.
House Panel Raises Data Exposure Concerns
The congressional report from the House Select Committee on China asserts that Webull's software architecture, data pipelines, and core engineering infrastructure rely on systems subject to Chinese intelligence laws, which can force domestic companies to surrender data to the state. Committee Chairman Rep. John Moolenaar stated that Webull exposes its data through technology providers in mainland China and an opaque ownership structure. The panel noted heightened concern following October 2025, when the broker began directly holding customer cash.
Regulatory filings show that founder Anquan Wang holds 79.2% of voting power in the firm, and its Chinese unit, Hunan Weibu, accounts for 863 employees—representing 62% of its overall workforce. The House panel pointed out that Webull previously told investigators it had no personnel located in China. The findings follow initial inquiries sent by lawmakers in a December 2024 letter and arrive weeks after a September summit between President Donald Trump and Chinese leader Xi Jinping.
Webull Pushes Back on Inaccuracies
In response, Webull characterized the committee's report as containing "significant inaccuracies," maintaining that all US customer data is stored in the United States with access strictly controlled locally. The brokerage also highlighted that the panel had not contacted the firm in more than 20 months.
Although the committee's report did not ban the application, freeze accounts, or issue financial penalties, the scrutiny comes as competition intensifies among major retail brokers like Robinhood. Webull currently manages $24.6 billion for approximately 28 million users worldwide. Customer funds on the platform remain protected under standard brokerage safeguards: Securities Investor Protection Corporation (SIPC) coverage protects up to $500,000 per account (including $250,000 in cash) in the event of broker failure, while cash in its Cash Management program swept to partner banks carries Federal Deposit Insurance Corporation (FDIC) insurance up to $5 million.
Why It Matters
This investigation highlights the growing regulatory and geopolitical scrutiny facing financial technology platforms that maintain cross-border development teams or foreign control structures. As data sovereignty becomes a primary focus for US lawmakers, trading platforms operating with offshore engineering units could face heightened compliance burdens or operational mandates. Market participants will be watching whether congressional pressure translates into formal administrative action or forced corporate restructuring regarding Webull's overseas workforce.
