Webull faces stock drop and scrutiny over alleged Chinese security risks

The cryptocurrency and trading platform Webull is facing increased scrutiny over its alleged connections to China. The New York Post, XTB.com, and Yahoo Finance report that Webull stock recently dropped by 20 percent. The New York Post notes that shares of the platform have fallen nearly 76 percent since the company went public through a special purpose acquisition company early last year. [1][4][6]

Concerns have focused on whether the firm collects sensitive personal data on American customers that could be shared with Chinese intelligence services, an allegation that Webull has denied, according to the New York Post. Crowdfund Insider reports that the House Select Committee on China has declared Webull a national security risk due to these alleged ties. In response, Barron's reports that Webull has pushed back against the House report. [1][3][7]

Webull was founded in 2016 by Wang Anquan, a former manager at Alibaba and Xiaomi, in Changsha, China. It began under the Chinese holding company Hunan Fumi Information Technology Co., Ltd. as an application aggregating market data. In 2017, the platform expanded its operations into the United States by establishing Webull Financial LLC as a registered broker-dealer. [11]

The market reaction remains mixed across financial reports. Simply Wall Street reports that Webull stock could be 55 percent undervalued following the selloff caused by the security concerns. Meanwhile, the Wall Street Journal reports that the chief executive officer of Solana Company stated China will find a way to manage cryptocurrency. [2][5]