According to reports and Futu founder Li Hua, China’s May 22 crackdown bars new mainland China clients and deposits, gives firms two years to rectify operations, and may limit buying while allowing withdrawals.
China has intensified scrutiny of cross-border investing by proposing more than 2.2 billion yuan, or about $324 million, in combined penalties against Futu Holdings, UP Fintech and Longbridge Securities. The measures require the firms to stop onboarding new mainland China clients and halt new capital inflows. Earlier reporting said existing users would be limited to selling holdings and withdrawing funds during a two-year transition period before mainland-facing platforms close, while Futu founder Li Hua later said the May 22 policy changes mainly restrict mainland China deposits and buying activity rather than forcing existing account closures. Li said the changes are not expected to materially affect Futu’s 2025 goal of adding 800,000 new clients. As of the end of the first quarter, mainland China clients accounted for 13% of Futu’s funded users, 17% of client assets and 20% of revenue. The crackdown targets a brokerage channel widely used for access to U.S., Hong Kong and other offshore equities, amid broader concerns over cross-border securities transactions, foreign exchange controls, leverage risk and informal capital routing.