Tiger Brokers Parent Swings to Loss as China Penalty Wipes Out Its Profit

UP Fintech
Holding, the company behind the Tiger Brokers app, fell into the red in the
first quarter after Chinese securities regulators imposed roughly $59.7 million
in fines and confiscated gains across several of its units.

The
Nasdaq-listed broker (NASDAQ: TIGR) reported a
net loss of $26.9 million for the three months to March 31, a reversal from the
$30.4 million profit it posted a year earlier. Revenue moved the other way,
rising 26.3% to $154.9 million.

The penalty
came from the Beijing bureau of the China Securities Regulatory Commission,
which on May 22 ordered the confiscation of illegal income and levied
administrative fines totaling about 411 million yuan.

Regulators
said certain Tiger Brokers subsidiaries had run an unlicensed
cross-border securities business and carried out illegal fund and futures
activity in mainland China. The split was roughly 308 million yuan in fines and
103 million yuan in confiscated income.

The charge
lands weeks after
a far larger one against rival Futu Holdings. In mid-May, the CSRC and its
Shenzhen bureau told Futu it faced proposed fines of about $271 million over similar accusations, namely
that its entities handled securities trading, fund sales and futures business
on the mainland without the required approvals.

The same
enforcement wave reached other names. Chinese authorities flagged action
against a New Zealand unit of Tiger Brokers and a Hong Kong arm of LongBridge
Securities, a sign regulators are tightening the screws on platforms that route
mainland clients into overseas markets.

Both Tiger
and Futu have spent years operating in this grey zone. They are registered in
Hong Kong, but the “one country, two systems” framework does not
extend licensing to the mainland, and Beijing has never issued licenses for
cross-border online brokerage.

The two
firms were first warned by the CSRC back in
2022, and have been
pushing growth toward Singapore and other markets ever since.

Operating Numbers Hold Up
Beneath the Charge

Strip out
the fine and the picture looks different. The penalty sat in the “others,
net” line, which swung to a $64.1 million expense and pulled pretax
results into a $16.5 million loss. Without it, the broker would have stayed
comfortably profitable.

Commissions
rose 15.3% to $67.2 million on heavier trading, while interest income climbed
19.8% to $64.5 million. Other revenue, which the firm tied to its wealth
management push, jumped to $20.7 million from $7.9 million.

Costs grew
faster. Total operating expenses rose 32.9% to $89.2 million, with the staff
bill up 38.5% as the company said it added headcount and accrued higher bonuses
to support its overseas expansion.

Singapore and Hong Kong
Drive Client Growth

UP Fintech
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Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl

Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl
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added 28,900 funded accounts in the quarter, “with great majority of which
came from Singapore and Hong Kong markets,” Chairman and Chief Executive
Wu Tianhua said. Total funded accounts reached 1.28 million, up 11.3% from a
year earlier.

Net money
coming in hit $2.9 billion, which the company said marked its first quarter
ever above $2 billion in net inflows from consolidated retail accounts. Singapore has become a core market
for the broker,
where it switched on trading for local retirement savings accounts last year.

Client
assets told a rockier story. A market pullback across financial, technology and
consumer stocks wiped out $4.9 billion in mark-to-market value, pushing total
assets down 3.2% from the prior quarter to $58.9 billion, though they were
still up 28.4% on the year.

Wu said
Nasdaq’s second-quarter rebound has since recovered those paper losses on a
quarter-to-date basis.

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