US Lawmakers to Question China’s Role in GameStop Pump – CoinDesk


“We are living in a time of increased competition between Chinese tech and so-called western tech,” said James Cooper, an associate dean at California Western School of Law, who served as consultant to the U.S. Department of State, advising on emerging technologies. 

Political theater aside, there may be a few reasons these lawmakers are looking at China. One is the possibility of Chinese retail investors’ eagerness to jump into the GameStop stock frenzy. The other is the continuing influence of Chinese-owned trading apps in the U.S. 

China has some 167 million retail investors who hold over 28.5% total market value of the Chinese stock market (approximately $200 billion). Chinese retail investors are able to trade GameStop stock via Chinese online brokerage platforms with U.S. broker licenses, such as Moomoo and Webull.  Both Moomoo and Webull, which are major Robinhood rivals in the U.S., are founded by former employees of Tencent and Alibaba, respectively.

Webull became the second most popular app in the U.S. around the time when online brokerages were restricted from buying GameStop and AMC Entertainment stocks. Both Webull and Moomoo have become alternative platforms for retail investors as Robinhood grapples with backlash caused by its trading restrictions. 

Retail investors appeared to have turned to Webull after Robinhood halted the trading of certain stocks that were being pumped by the Reddit group, including GameStop. However, Webull later ceased such transactions, claiming its clearing firm told it to stop opening new positions in certain stocks. 

Tencent’s funding soon drew criticism from Reddit’s users who prioritize privacy and decried censorship. However, some analysts believe it is unlikely Tencent would be able to control content on the platform. 

San Francisco-based Moomoo is part of Futu Inc.’s efforts to expand its businesses in the U.S. atop Futu’s success in mainland China. Founded by Hua Li, who was one of Tencent’s earliest employees in 2012, Futu is one of the largest online brokerage platforms in China, and lets retail users in mainland China trade Hong Kong- and U.S.-listed stocks. 

Futu Inc. is a broker-dealer registered with the U.S. Securities and Exchange Commission and is a member of both the Financial Industry Regulatory Association and the Securities Insurance Protection Corporation (SIPC), according to a statement on its website. 

Webull has voluntarily sought a review of its ownership by the Committee on Foreign Investment in the U.S. (Cfius), a panel that tends to prevent some Chinese-owned companies from expanding in the U.S. for national security reasons, the firm’s chief executive, Anthony Denier, said in the report. 

This content was originally published here.