The House Select Committee on China says internal Webull messages from 2021 suggest an employee likely located in China could access information about a U.S. customer account. The Microsoft Teams exchange involved Brendan Fuller, a manager at Webull's U.S. brokerage, and employee Zhenghan Wang, nicknamed "Rock." The committee said the evidence pointed to Wang being in China with access to U.S. customer data during Wang's employment. The committee based the location assessment on timestamps indicating daytime working hours in Beijing and Wang's use of software translation into simplified Chinese.
Fuller raised concerns with Wang about a particular trading account. The exchange concerned the Customer Identification Program, or CIP, a U.S. regulatory requirement for financial institutions to verify the identities of account-opening individuals and entities. Fuller told Wang that a China team member and a U.S. counterpart had approved the account. Wang asked under what CIP circumstances an account could be approved. Fuller replied, "I think we just approve them all no matter what ..." Fuller added, "And then we pay for vendors. And create report and work." Wang described CIP using a Chinese phrase meaning "Exists in name only" or "Useless."
Webull's spokesperson did not directly answer questions about Wang's access in 2021 or whether that access contradicted Webull's assertion that U.S. data does not go to China. The spokesperson said safeguarding customer data is central to Webull's operations. Webull said U.S. customer data resides exclusively on AWS servers in Virginia and Oregon, with sensitive data accessible only to employees based in the United States. Webull said only U.S.-based personnel direct the company's U.S. broker-dealer operations. Webull also said nobody outside the United States has ever held operational or decision-making authority over that business.
Webull said the messages concerned a routine 2021 matter involving the Financial Industry Regulatory Authority that had been concluded. FINRA is the self-regulatory organization for member broker-dealers. Webull questioned the timing and circumstances of the messages' disclosure alongside a committee report that Webull said relied on preliminary and outdated information. Webull rejected what the company called irresponsible speculation and said the company's data safeguards are strong, continually improved and independently verified.
The committee's analysis followed by nearly two weeks the first detailed coverage of the bipartisan panel's October 7 report. The report concluded that Webull has structural connections to China's government that threaten national security in American finance. Webull has 28 million users. Webull shares fell more than 19% following the October 7 report. Webull responded at the time that U.S. customer data remained in the United States and that control over access to sensitive data rested in the United States. The newly released messages raise questions about whether those restrictions have always applied.
The committee's October 7 report argued that Webull's corporate structure leaves software development, data pipelines and core engineering dependent on infrastructure directly subject to Beijing's laws. Those laws can require companies to cooperate with the government, including through compelled data transfers. The committee has concentrated on threats from China and on shielding U.S. industry from China's competition.
The committee issued a release on Tuesday titled "The Facts on Webull's Ties to China." The committee accused Webull of making numerous false statements about the company's business and dealings with the panel after the report appeared. The release paired five Webull claims with responses that the committee labeled "The Truth." The committee said the report did not challenge Webull's statement about where U.S. customer data is stored. The committee said the finding instead concerned who could access the data and the systems processing the data. The committee said the report found that Webull affiliate Webull Technologies Limited had previously hosted certain user data with China-based Tencent Cloud. The committee said Webull had not identified the data Tencent hosted or disclosed when that arrangement ended.
Separately, Webull said Tuesday that Webull was partnering with prediction market platform Kalshi to offer perpetual futures to U.S. customers. Webull said the initial perpetual futures would cover cryptocurrencies. Perpetual futures have no expiration date, unlike traditional futures.
House Committee Claims Webull Employee in China Accessed U.S. Customer Data
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Summary
The House Select Committee on China claims a Webull employee in China accessed U.S. customer data, citing 2021 internal messages. A U.S. manager and an employee nicknamed 'Rock' discussed the Customer Identification Program, with 'Rock' using Chinese to call it 'useless.' Webull insists U.S. data is stored domestically and denies unauthorized access. The report also raises concerns over Webull’s ties to China and potential risks. On-chain news continues to highlight regulatory scrutiny in the sector. Inflation data remains a key macro factor for crypto markets.
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