House Panel Calls Webull a China Risk but Orders No Ban

On Wednesday morning, a report came out in Washington.

It carried no fine, no ban and no instruction to any regulator.

Webull shares still fell nearly 30% before the open and about 20% during the session.

What the Committee Found

In a bipartisan report, the House Select Committee on China said Webull is structurally tied to China in six areas. They are ownership, technical workforce, technology infrastructure, cross-border data routing, financing and compliance.

The report describes "a profound gap" between Webull's marketing as an American firm and who actually controls it.

The concrete claim is about staff. The committee says Webull first told it that it had no offices or employees in China. Yet the company's own SEC filing shows its Chinese subsidiary, Hunan Weibu, had 863 employees at the end of 2025: 62% of the total workforce.

The committee's concerns grew after October 2025. Since then Webull has held client cash directly. FINRA approved the firm to clear its own trades in April 2026. The report calls this a structural exposure of billions of dollars of American capital.

Committee chair John Moolenaar told CNBC: "China-based operations put American investors and their data at risk."

A Statement or an Action

Headlines say Congress declared Webull a risk. Three questions need separate answers.

What was said? A finding and a piece of advice. Moolenaar said investors should weigh this information when choosing whom to do business with. That is a stated preference, not a ban.

Is there a binding tool? No. The China committee is an investigative panel; it does not license brokers or revoke licenses.

That power sits with the SEC and FINRA. No automatic fine, ban or order came with the report.

Is the pressure new? No. Indiana Attorney General Todd Rokita announced a multistate inquiry in April 2024. The committee wrote to the company in December 2024.

In June 2025, Senators Tommy Tuberville and Jim Banks asked the SEC to revoke the licenses of Chinese-owned brokers. None of this has yet turned into an action.

The market did not read the report as regulatory news.

It read it as a story about losing clients.

Why 20% Without a Ban

A broker's value depends largely on the money clients leave with it. Of Webull's $198.8M in second-quarter revenue, 57% came from order flow payments. If clients stop trading, that revenue disappears.

Moving an account needs no ban. A transfer that takes a few days is enough.

This is not a forecast. It is an assumption embedded in the price. Actual outflows could be smaller or larger.

There are two separate risks here.

Under U.S. broker rules, client money is kept apart from the firm's own funds, whoever owns the firm. The committee's objection is about control and data access. We cover this distinction in our guide to choosing a broker.

Why Rivals Fell Less

The same morning, Robinhood slipped about 3% and Interactive Brokers about 2%. The financial sector fund XLF was down around 0.5%.

These are morning readings; Webull recovered part of its loss later in the day. The pattern held, though: the market treated the report as a Webull problem, not a sector one.

There was other pressure that day.

Stocks slipped after Fed minutes pointed to another hike by year-end. The 10-year yield touched its highest level since 2002 intraday. The Russell 2000 fell 1.3%.

But that does not explain the gap between Webull and its rivals.

The index's monthly path sets the frame; Webull's move sits far outside it.

Webull's three-month path shows the report hit a stock that was already weak. Shares had lost about 40% over the past month.

The Company's Response

Webull said the report contains "significant inaccuracies and unsupported conclusions."

The company says U.S. customer data is stored in the U.S. Its U.S. business is run from St. Petersburg, Florida, and New York. Webull said it is ready to address questions with the SEC, FINRA and other regulators.

The company reports more than 28 million registered users in 18 markets. About 85% of funded accounts belong to U.S. customers.

What Is Left

The report's real footprint will show up in two places. First, whether regulators take formal action. Second, whether third-quarter client assets fall back from $28.5B.

After the report, a law firm said it had opened an inquiry into possible securities claims on behalf of shareholders.

This article draws on Yahoo Finance, Benzinga, Quartz and 24/7 Wall St. coverage of CNBC's October 7 exclusive; Webull's second-quarter results filed with the SEC (Form 6-K); the China committee's December 2024 letter; and Senator Tuberville's June 2025 statement. Share moves are intraday readings; the October 7 closing price could not be verified at publication. Market value was calculated using the share count the company reported as of June 30. The full committee report was not accessible during reporting; phrases quoted from it are those that match across multiple independent accounts.