Companies · 7 Oct 2026 · 2 min read
Webull shares drop 18% as House China panel flags national security risk
A bipartisan House committee says the trading app's ties to China pose a security risk to US finance. Webull rejects the report as inaccurate, but its stock fell sharply.
The short answer
Webull's stock fell 18% in morning trading Wednesday after the bipartisan House Select Committee on China released a report alleging the trading platform is structurally tied to China and poses a national security risk. Webull called the report inaccurate. The findings add regulatory risk for a broker holding $24.6 billion in customer assets.
What’s going on here?
The House Select Committee on the Chinese Communist Party released a report Wednesday, shared first with CNBC, alleging that online broker Webull's ownership, engineering staff, technology and data routing are tied in structural ways to China. The committee alleges this exposes US investors' money and data to Chinese laws that can compel companies to cooperate with the state. It also alleges Webull understated its China-based staff, saying a mainland subsidiary employs 863 people, or 62% of the global workforce. Webull, which reports 28 million users worldwide, said the report contains significant inaccuracies. Its shares fell 18% in morning trading.
What does this mean?
This report is the result of a probe that started in late 2024, when committee chair John Moolenaar and ranking member Raja Krishnamoorthi wrote to Webull's chief executive asking how the company keeps its operations independent of Beijing and where US user data is stored. The new findings go further, arguing that concerns have grown since October 2025, when Webull began holding customer cash directly, according to a filing the committee cited.
Webull's defense is straightforward. A spokesperson said its US business is run from St. Petersburg, Florida and New York, that US customer data is stored in the US, and that access to sensitive data is controlled from the US. The company also said the committee never asked it to clarify the points before publishing. A congressional report is not a regulatory action, and the committee's claims are allegations, not findings by a court or regulator.
Why does it still matter for the stock? A broker depends on trust. Customers need to believe their cash and data are safe, and partners need confidence that regulators will not restrict the business. Even without any formal action, a high-profile national security report can deter new customers and raise questions from regulators such as the SEC and FINRA, which oversee US brokers.
The timing also stands out. As CNBC pointed out, it lands only weeks after Donald Trump and Xi Jinping held a mostly cordial September summit, and the two leaders are due to meet again before year end. That suggests scrutiny of China-linked financial firms on Capitol Hill continues regardless of the diplomatic tone between the two governments.
The bull case
A congressional report carries no legal penalty by itself, and Webull insists its US operations, data storage and access controls sit in the US. If regulators take no action and the company answers the committee's questions convincingly, the sell-off could look overdone. Webull still offers a wide product range across 18 markets and has a large global user base.
The bear case
The committee is bipartisan, which makes the issue harder to dismiss as politics. If regulators open inquiries or customers move to rivals such as Robinhood or Charles Schwab, growth could slow. Allegations that Webull misstated its China-based staffing could also hurt credibility with investors and partners, and further US-China tension could revive calls for tougher action.
Why should I care?
For markets:
Webull shares are directly exposed, and other US-listed companies with Chinese operating ties could face renewed investor caution. Rival retail brokers may be watched for any shift in customers.
The bigger picture:
For anyone using a trading app, it is a reminder to know who runs the platform, where your data is held and how customer cash is protected. Those questions matter as much as fees and features.
Market impact
| Asset (ticker) | Potential direction | Timeframe | Confidence | Reason |
|---|---|---|---|---|
| Webull (BULL) | ↓ bearish | Short term | Medium | Bipartisan national security report raises regulatory and reputational risk for the broker. |
| Robinhood (HOOD) | ↔ neutral | Short term | Low | Named as a competitor; could gain if users leave Webull, but effects are uncertain. |
Potential impact, not investment advice.
Frequently asked questions
Why did Webull stock fall today?
Webull shares fell 18% in morning trading on Wednesday after the bipartisan House Select Committee on China released a report alleging the company is structurally tied to China and poses a national security risk. Webull said the report contains significant inaccuracies and unsupported conclusions.
Is Webull a Chinese company?
Webull says its US business runs from St. Petersburg, Florida and New York, with US customer data stored in the US. The House committee alleges its ownership, engineering and data systems remain tied to China, including a mainland subsidiary it says employs 62% of staff.
Is my money safe at Webull?
The committee's report is a set of allegations, not a regulatory ruling, and no restriction on Webull's business has been announced. Webull is a registered US broker overseen by the SEC and FINRA. Customers with concerns can review the firm's disclosures on how cash and assets are held.
Sources: CNBC, House Select Committee on the CCP
