China’s securities regulator, the China Securities Regulatory Commission, announced on May 25 that it would penalize three major offshore brokerages for their crypto ties – Tiger Brokers, Futu Securities and Longbridge Securities – for illegal cross-border financial trading targeting mainland investors, as part of a broad nine-agency implementation plan that sets a two-year deadline to eliminate all cross-border securities, futures and fund management activities unauthorized access to the Chinese financial landscape.
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The announcement, made public through the State Council Information Office and covered by China’s official Xinhua news agency, represents the most coordinated regulatory enforcement action Beijing has taken against offshore financial platforms since banning cryptocurrency mining in 2021. The CSRC said it would confiscate all illegal earnings from domestic and foreign entities associated with Tiger, Futu and Longbridge, and impose tough penalties in accordance with Chinese law, according to the official Xinhua report.
As part of the implementation plan, the three brokerages were granted a two-year phase-out period, during which they are strictly prohibited from facilitating new purchase orders or accepting capital inflows from mainland investors. Only sell orders and capital withdrawals will be authorized. Upon expiration, affected institutions must completely shut down their mainland-facing websites, trading applications and support servers, per the SCIO announcement.
BTC's price trends to the upside since March 2026 as seen on the daily chart. Source: BTCUSD on Tradingview
Why it matters for crypto
The enforcement measures are not nominally aimed at crypto – they are targeted at offshore securities and futures brokerage firms. The cryptographic implications, however, are structural and direct. The primary channels through which Chinese traders access crypto markets – over-the-counter desks, peer-to-peer exchanges, and USDT on-ramps – operate in the same regulatory gray area that Beijing has now formally committed to eliminating in all cross-border financial activity, according to an analysis by BeInCrypto published on May 22.
The February 2026 crackdown, in which the People’s Bank of China and seven other agencies jointly expanded China’s current crypto ban to explicitly cover stablecoins, RWA tokenization, and issuance of offshore yuan-pegged stablecoins, established the policy framework.
The May 25 action represents its enforcement arm – a signal that the two-year rectification deadline applies broadly to any unauthorized cross-border financial channel, not just licensed brokerages, according to the language of the CSRC’s implementation plan as reported by Xinhua.
The market reaction was rapid. U.S.-listed shares of Tiger Brokers’ parent company fell more than 10% in premarket trading. Futu Holdings fell more than 5%, with some session reports showing declines as high as 35%, according to Wu Blockchain’s May 22 coverage of the announcement.
The larger model
Beijing’s enforcement posture for 2026 reflects deliberate sequencing: the February policy opinion established the expanded legal scope covering stablecoins and tokenization; the May brokerage action demonstrates the State’s desire to impose significant financial sanctions on large publicly traded companies operating in violation of this perimeter.
For participants in the nascent industry who have continued to access crypto through informal Chinese channels, the enforcement trajectory is heading in one direction — and the two-year rectification deadline gives Beijing a concrete timeline against which to measure compliance.
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This development marks a critical turning point for crypto’s relationship with Chinese capital. Whether the crackdown accelerates demand for over-the-counter crypto as mainland investors seek alternative stores of value – as has happened historically in previous waves of enforcement in China – or succeeds in significantly reducing cross-border digital asset flows, will determine whether Beijing’s crackdown will strengthen or simply reorient China’s crypto involvement.
Cover image of Grok, BTCUSD on Tradingview
