Someone knew something. Or at least, someone was betting like they did.

The day before China’s securities regulator dropped the hammer on Futu Holdings and Up Fintech’s Tiger Brokers, options activity on both stocks surged to levels that make “unusual” feel like an understatement. Put options on Futu hit their highest volume since October 2024. Tiger Brokers saw put volume balloon to roughly 70,000 contracts, about eight times its normal trading level.

Then, on May 22, the China Securities Regulatory Commission announced it was penalizing Futu, Tiger Brokers, and Longbridge Securities for conducting unauthorized cross-border securities activities targeting mainland Chinese investors. The CSRC said it would confiscate all illegal earnings from the firms. Futu’s shares cratered as much as 39%, falling to around $75. Tiger Brokers dropped up to 47%, hitting approximately $3.63 in early trading.

For context, the CSRC’s penalty against Futu reportedly included a fine of approximately 1.85 billion yuan, roughly $271 million.

This wasn’t a bolt from the blue. The CSRC first flagged these companies for unlawful cross-border activities back in December 2022, prohibiting them from onboarding new mainland Chinese clients. Both Futu and Tiger Brokers removed their apps from mainland China in 2023 as part of compliance with those earlier warnings. The enforcement fits into a broader two-year strategy Chinese authorities have been executing to combat illegal capital outflows and aggressive cross-border trading practices.

The collateral damage extended beyond the three named firms. Other US-listed Chinese companies, including Alibaba and Baidu, saw their stock prices feel the weight of the announcement.