Webull faces scrutiny over China access to U.S. customer data

Traders Union
All News
Broker News
Webull China data scrutiny

All news

Highlights

House Select Committee on China found internal messages suggesting a Webull employee in China accessed U.S. customer account data in 2021.
Webull shares dropped more than 19% after the committee's Oct. 7 report accused the firm of structural ties to China's government and posing a national security risk.
Ongoing House scrutiny questions Webull's past data access practices and whether they aligned with public assurances regarding U.S. customer data protection.

Leading Forex Broker in United States

7.7/10

*Rated by real traders on Traders Union

Chosen by 2 400+ local traders in the last 3 months.
Traders earn on average 12% more per month vs other brokers.

Start with Plus500

Committee analysis and internal message details

As reported by CNBC, citing the House Select Committee on China, internal Microsoft Teams messages from 2021 suggest that a Webull employee believed to be in China had access to information about a U.S. customer account, despite the company's prior statements that sensitive U.S. customer data is restricted to U.S.-based employees.

The messages were exchanged between Brendan Fuller, a manager at Webull's U.S. brokerage, and an employee identified as Zhenghan Wang, whose nickname is "Rock." In one exchange about a particular trading account, Fuller wrote, "We saw these problems ... and approve account," and Wang replied, "Yes,CIP." When Fuller asked who approved the account, Wang asked what situation could allow them to approve the account. Fuller then said they approved them all regardless, and Wang expressed skepticism in a follow-up message.

The committee said Wang was likely in China at the time of the exchange. A spokesperson for the panel said the evidence in the messages pointed to Wang being located in China while having access to U.S. customer data, and the committee's analysis cited time stamps and translation settings as support for that conclusion.

Market and regulatory implications

Webull has said that U.S. customer data is stored in the U.S. and that access to sensitive customer data is controlled by the U.S. A company spokesperson did not directly answer questions about Wang's access to U.S. customer data in 2021 and reiterated that Webull takes customer data protection seriously.

The new questions emerge after the committee's Oct. 7 report concluded that Webull is quietly "tied in structural ways" to China's government and poses a national security threat to American finance. CNBC first detailed that bipartisan report nearly two weeks earlier, and Webull shares fell more than 19% after its release.

The committee, which focuses on threats posed by China and on protecting U.S. industry from Chinese competition, is now adding scrutiny to whether Webull's historical data access practices matched its public assurances to customers and regulators.

Our earlier article on CTOS Digital’s cybersecurity incident outlined the company’s estimate that the breach would cut net profit by RM12 million and revenue by RM16 million if some services stayed disrupted into the third week of October. We also noted that each additional week of disruption could further pressure earnings and weigh on customer confidence, even as some analysts at the time remained relatively constructive on the stock.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.