U.S. Rep. John Moolenaar (R-MI), chairman of the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, recently launched an investigation into Webull Corp., an electronic trading platform operating in the United States that’s owned by the Chinese holding company Hunan Fumi Information Technology.
Rep. Moolenaar is particularly interested in Webull’s ownership structure and ties to the People’s Republic of China (PRC), as well as the risks those ties may pose to the security of American investors’ data and the broader U.S. financial market, according to a Nov. 25 letter he sent to Webull President and CEO Anthony Denier.
“Specifically, 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 (CCP) interests,” wrote Rep. Moolenaar and Committee Ranking Member Raja Krishnamoorthi (D-IL).
“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,” they wrote.
The committee members questioned Webull’s intention in February 2024 to go public by merging with SK Growth Opportunities Corp., a special purpose acquisition company (SPAC) traded on the Nasdaq, but later terminated due to cryptocurrency-related issues at Webull.
“There are additional concerns surrounding Webull’s planned SPAC deal,” wrote the lawmakers. “Our review of publicly available information has identified serious concerns regarding Webull’s ties to the PRC and to CCP-aligned actors.”
Webull reportedly has not only entered technology-sharing agreements with these companies, they added, but also shares personnel, and enjoys grants from the CCP that flow through Webull’s Chinese sister company, Hunan Weibu, intended to support Webull’s operations abroad.
Rep. Moolenaar and his colleague also pointed out that while Webull recently moved its team to Florida, the timing of the move, in advance of the planned SPAC deal, and the sudden shift out of the PRC, raises questions that require clear answers.
“In sum, while Webull has restructured to create the impression that it is no longer a PRC company, it appears to remain deeply intertwined with PRC entities, including Fumi Technology and Hunan Weibu,” they wrote, noting that these issues collectively raise doubt Webull’s readiness to operate as a transparent and compliant participant in the U.S. financial markets.
They requested that Denier answer several questions and provide the committee with documentation showing what measures Webull has implemented to ensure the autonomy of its operations from PRC governmental interference, as well as to show the relationship between Hunan Weibu and Webull, among several other requests.
The Select Committee expects answers to their questions by Dec. 31, according to their letter.