Futu Holdings, UP Fintech US Shares Crater as China Launches Cross-Border Brokerage Crackdown

US-listed shares of online brokerage Futu Holdings (FUTU) plunged Friday after China’s securities regulator announced a sweeping crackdown on unauthorised cross-border investing, naming Futu, UP Fintech’s Tiger Brokers (TIGR), and Longbridge Securities as targets for operating without onshore licences.

FUTU stock opened at $81.08 — hitting an intraday low of $80.50 — before recovering to close at $89.76, still down $34.10 or 27.5% from its prior close of $123.86.

TIGR shares followed a near-identical trajectory, closing at $4.36, down 25.3% from $5.84, after touching a session low of $4.00. Combined, hundreds of millions of dollars in market capitalisation were wiped out in a single session.

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China’s markets watchdog, acting alongside seven other agencies, stated that illegal cross-border securities operations breach domestic law, undermine market stability, and harm investors, vowing to eradicate non-compliant activity within two years. Futu confirmed it received a formal investigation notice with proposed fines totalling approximately RMB 1.85 billion (~$255 million), alongside a personal fine for its CEO.

Wall Street moved swiftly. JPMorgan downgraded FUTU to Neutral from Overweight, slashing its price target to $87 from $300, warning of a potential 20% revenue and 30% earnings decline in 2026 if Futu is forced to exit all mainland Chinese clients, who represent around 13% of funded accounts.

Goldman Sachs also cut FUTU to Neutral from Buy, lowering its target to $102 from $210, citing “elevated regulatory uncertainty” and rising client acquisition costs in new international markets as the company pivots away from mainland China.