Webull (BULL) Plunges as House Panel Flags China Ties

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Webull (BULL) shares fell as much as 29% after a House China committee called its ties to Beijing a national security risk; Robinhood (HOOD) slipped 3%.

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What Did the House Committee Say About Webull?

The committee said Webull's ownership, technical workforce, technology infrastructure, cross-border data routing, corporate financing and compliance frameworks all connect to China. It described a "profound gap" between Webull's marketing as an American company and who controls the firm, which is based in St. Petersburg, Florida.

The report said a mainland Chinese subsidiary employs about 62% of Webull's global workforce. It also said the company initially told the committee it had no offices or employees in China. Software development, data pipelines and core engineering rely on infrastructure subject to Chinese law, which can compel firms to hand over data and cooperate with the state.

Committee chair John Moolenaar said Webull's China-based operations put American investors and their data at risk.

Why Is Customer Cash a Central Concern?

The panel said its concerns have escalated since October 2025, when Webull began holding customer cash directly. In the committee's words, that created a "structural exposure of billions of dollars in American capital" to a company tied to Beijing. Holding client cash differs from routing orders to an outside clearing firm. It places balances, account data and compliance systems under the broker's own control.

Webull is also building a research center in Changsha, China, valued at 350 million yuan, or about $51.6 million.

How Did Webull Respond?

The company rejected the findings. A spokesperson called it "deeply disappointing" that the committee published a report with "significant inaccuracies and unsupported conclusions without ever seeking clarification from Webull."

Why Did Robinhood and Rivals Fall Less?

Rival brokers fell by a fraction of Webull's decline because the report targeted Webull's structure alone. Robinhood and Interactive Brokers carry no comparable China-linked operating footprint. Their moves of 3% and 2% were modestly larger than the 0.4% drop in the broad market and the 0.52% decline in the financial sector fund XLF. That suggests some sympathy selling across retail-focused brokerages rather than a sector-wide repricing.

What Comes Next for Webull?

The report carries no automatic order, fine or ban. The next catalyst for shareholders is whether a federal agency opens a formal review of Webull's data handling, customer-cash arrangements or ownership structure. Law firms have announced investor investigations following the drop, which adds legal overhead to the regulatory uncertainty.

Webull's future depends on how credibly it can separate U.S. customer data and engineering from its Chinese operations. Congressional scrutiny of China-linked financial and technology firms has widened in recent years, and U.S. retail platforms that hold client assets draw particular attention.

Outlook

Webull now faces a credibility test with regulators and customers after a share-price collapse that left the stock well below its yearly high. Peers' modest losses show investors treat the issue as company-specific for now. The key signals to watch are any agency action, disclosures from Webull on its China operations and whether customer deposits hold steady.