Letter to Webull CEO on Company's Deep Ties to the PRC

Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party sent a letter to Mr. Anthony Denier, the President and CEO of Webull, a popular electronic stock trading platform that operates in the US, with concern regarding Webull's troubling ties to the People's Republic of China (PRC) and the risks those ties may pose to the security of American user data. 

The lawmakers write, "It has come to our attention that Webull, through its ownership and operational frameworks, maintains close ties with entities based in the PRC and connected to firms and individuals who advance the Chinese Communist Party’s interests. These continuing corporate ties to the PRC and reliance on CCP-aligned technologies and personnel raise serious questions about the security of U.S. user data and about Webull’s willingness and ability to comply with U.S. regulations regarding transparency and fair-trading standards--and therefore about the risks Webull poses to the U.S. financial market...."

The lawmakers continue, "The PRC's stringent regulatory environment, coupled with laws that compel companies to cooperate with state intelligence activities, pose a not-insignificant risk to U.S. citizens' personal and financial data."

In the letter to Mr. Anthony Denier, the lawmakers describe that while operating in the United States, Webull has retained close ties to a network of Chinese technology companies, Fumi Technology and Hunan Weibu. Webull has not only entered technology-sharing agreements with these companies but also shares personnel. For example, the founder and largest owner of Fumi technology and the executive director of Hunan Weibu is a registered broker for Webull. Additionally, Webull enjoys grants from the Chinese Communist Party that flow through Webull's Chinese sister company, Hunan Weibu, intended to support Webull's operations abroad.

In anticipation of Webull's attempt to go public in the United States, it has obscured the fact that it has brokers registered in China and shares employees and technology with Fumi Technology and Hunan Weibu. These entities, linked to the Chinese Communist Party, raise concerns about Webull’s independence, the security of U.S. investor data, and its ability to comply with U.S. financial regulations.

Additionally, the ownership structure connecting Webull to China-based firms raises questions about the platform's autonomy and the potential influence of Chinese government policies on its decision-making. Reports of missing or incomplete disclosures to the SEC suggest irregular trade and a lack of transparency, which could undermine investor confidence and violate U.S. financial reporting standards. The reliance on CCP-aligned technologies further exposes sensitive investor data to risks of state surveillance under Chinese data-sharing laws. Moreover, China’s stringent regulatory environment could limit Webull's ability to facilitate withdrawals or access to funds, creating significant risks for U.S. investors who may struggle to retrieve their money from the market.

These issues collectively raise doubt Webull's readiness to operate as a transparent and compliant participant in the U.S. financial markets

The lawmakers argue that, "while Webull has restructured, potentially to create the impression that it is no longer a PRC company, it remains deeply intertwined with PRC entities, including Fumi Technology and Hunan Weibu."

As a result, to assist in the Select Committee's examination of Webull and the risks it poses, the lawmakers requested the following information from Mr. Denier and Webull:

Documentation sufficient to show what measures Webull has implemented to ensure the autonomy of its operations from PRC governmental interference.

Documentation sufficient to show the relationship between Hunan Weibu and Webull. 

Is any U.S. user data stored outside the United States or in the PRC, as suggested by Tencent documentation referenced above? What steps has Webull taken to protect the data privacy of its American customers, especially in light of PRC laws that could potentially compel data sharing with the state? Please include relevant documentation sufficient to explain these measures.

What assurances can Webull provide to its U.S. customers regarding the liquidity of their investments and the prompt return of their capital in the event of market disruptions influenced by the CCP? Please include relevant documentation sufficient to explain these assurances.

Why did Webull suddenly de-register its brokers located in the PRC? As of the date of this letter, does Webull have any employees, whether full- or part-time, located in the PRC? As of the date of this letter, are Webull’s U.S.-registered brokers all residing in the United States?

Documentation sufficient to describe the process and controls you have in place for compiling, reviewing, and submitting SEC Rule 606 disclosures, including: 

• Documentation sufficient to show the reasons for missing data in the recent 606 disclosures. Are these omissions related to technical issues, data unavailability, or other factors?
• Documentation sufficient to explain the gaps in reported data.
• What compliance measures do you have in place to ensure the accuracy and completeness of your regulatory filings? How are these measures monitored and enforced internally?
• Have there been previous instances of similar reporting issues? If so, how were they resolved and what preventive measures were implemented to avoid their recurrence?
• Copies of recent internal audit reports that pertain to the order execution and reporting processes.
• Compliance training materials provided to employees involved in the reporting process both in the United States and in the PRC.
• Any correspondence with regulatory bodies regarding compliance issues, inquiries, or investigations related to Rule 606 disclosures.
• Records of any data corrections or amendments made to past 606 filings, including reasons for such changes and the authorization details.
• . Documentation on the software and systems used for data collection, processing, and reporting, including manuals, user guides, and system audit logs.
• Record of any past compliance violations, including details on how these were addressed.

Click HERE to view the letter