Webull Sinks 29% as House Panel Calls Its China Ties a National Security Risk; Robinhood Drops 3%, Interactive Brokers Slips

A House panel’s national security finding is changing how the market values Webull (NASDAQ:BULL | BULL Price Prediction) stock. The damage is landing hardest on the one online broker in this group with China-linked roots. Webull stock is down 29% to $5.15 in morning trading after the panel called the company’s China ties a national security risk.

Rival retail platforms are lower by far smaller margins. Also, Robinhood Markets (NASDAQ:HOOD) stock is down 3% to $108.93 as the selloff spills into the peer group. Interactive Brokers (NASDAQ:IBKR) stock is slipping 2% to $88.77, a softer retreat in line with the rest of the group.

Meanwhile, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.4% to $775.80. That leaves the broad market close to steady while China-linked fintech takes the greatest pressure in equities. For financial-sector context, the Financial Select Sector SPDR ETF (NYSEARCA:XLF) is down 0.52% to $53.72; note that this fund reportedly doesn’t hold a position in Webull shares.

House Panel Report Targets Webull’s China Ties

The House Select Committee on China released a report. It found Webull tied in structural ways to the government of China, and the committee stated that its concerns grew after Webull began carrying customer cash directly in October 2025. Named in the report were Webull’s ownership architecture, technical workforce, technology infrastructure, cross-border data routing, corporate financing and compliance frameworks. Lawmakers on the panel called Webull’s customer-cash arrangement “a structural exposure of American capital.”

Committee chair John Moolenaar stated that Webull’s China-based operations put American investors and their data at risk. Webull didn’t immediately respond to a request for comment, and the company’s own filings already list “Risks from government inquiries and investigations relating to connections to China” among its disclosed risk factors.

Webull is also building a 350 million yuan ($51.6 million) research and development center in Changsha, China, adding to the China-based footprint the committee noted.

Robinhood and Interactive Brokers Slip by Far Less

Webull competes with Robinhood and Interactive Brokers for the same retail order flow, which explains why all three stocks are lower, and that spread between the moves reflects a difference in jurisdiction, since Robinhood and Interactive Brokers both lack the China-linked ownership and engineering structure the committee describes.

Interactive Brokers runs a global automated electronic brokerage from Greenwich, Connecticut, and Robinhood operates from Menlo Park, California. The 3% decline in Robinhood stock and the 2% dip in Interactive Brokers shares suggest the market reads the report as a Webull-specific problem with modest impact. With SPY off just 0.4%, the broad market offers little explanation for a 29% decline in Webull stock.

Webull’s Bear Case Meets a Findings-Only Report

Webull’s bear case rests on a regulatory risk that no quarterly result can answer. A finding about corporate structure sits outside what an earnings beat can repair, and Webull stock was already trading far below its 52-week high of $13.25 before the report landed.

Supporting the bull case, the committee issued findings, which carry no automatic order, fine or ban against Webull. Webull has expanded into Thailand through Pi Securities. Before the report, the elimination of the Pattern Day Trader rule on June 4 had helped drive record trading volumes at Webull, and the company has also expanded into Japan, Singapore and Hong Kong. Those operating gains give Webull a business case that stands apart from the questions lawmakers raised about its structure.

What to Watch Next

Any regulatory action on what the committee found is the next major test for Webull, since no penalty follows automatically from the report. A key signal for shareholders is whether a federal agency opens a formal review of Webull’s ownership, data routing or customer-cash arrangements.

Webull’s formal response to the committee could also move Webull stock once the company addresses the findings publicly. Those concerned about their exposure may choose to reduce their share positions given Webull’s unresolved regulatory uncertainty and the 29% drop in Webull stock.

Share positions in Robinhood and Interactive Brokers should reflect the narrower, sympathy-driven declines in both stocks. Robinhood and Interactive Brokers face sector sentiment from this report, while Webull confronts a question about its corporate structure that lawmakers have now put on the record.

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