On May 22, 2024, the China Securities Regulatory Commission announced an investigation into the illegal cross-border business activities of cross-border brokerages including Tiger Brokers, Futu Holdings, and Changqiao Securities, and plans for administrative penalties. On the same day, the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission separately issued guidelines or notices for cross-border securities, futures, and fund operating activities targeting mainland investors, further tightening the compliance boundaries of this gray area. On the same day that regulatory measures were tightening, the token ONDO from the RWA track representative project Ondo Finance surged approximately 7.3% for a short time, reaching a high of about $0.44, with a 24-hour increase close to 7.32%. Some traders claimed that their weekly returns reached about 170% during this round of fluctuations. As regulatory scrutiny intensified and traditional cross-border channels were examined under a magnifying glass, at the same time on the same timeline, a token focusing on "real-world assets on the blockchain" surged against the trend, leading the media to quickly piece these two originally parallel events together, telling a new story of "funds looking for cryptographic alternatives amid tightening regulations." The issue is that there is currently no on-chain data or public evidence of institutional fund flows to prove that large-scale funds are indeed withdrawing from cross-border brokerages and flowing into the RWA track. This correlation is more an emotional projection than a verified causal chain. So, amidst the intertwining of high regulatory pressure and imagined expectations, whether this ONDO anomaly is a prelude to structural migration or an amplified short-term game is still in question.

The Regulatory Iron Fist Falls: Compliance Red Lines for Cross-Border Brokerages Tighten

On May 22, the China Securities Regulatory Commission directly named Tiger Brokers, Futu Holdings, and Changqiao Securities, initiating investigations into their "illegal cross-border business activities" and proposing administrative penalties, targeting the provision of unapproved offshore securities, futures, and fund operating activities for mainland investors. On the same day, the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission issued guidelines or notices for cross-border securities, futures, and fund operating activities aimed at mainland investors, drawing clearer boundaries in public documents on what can and cannot be done, eliminating the simple excuses of "offshore licenses" and "technological neutrality."

This move is not an isolated event but rather an escalation in the China Securities Regulatory Commission's long-term crackdown on domestic investors conducting cross-border securities transactions through unapproved offshore brokerages. The accumulated "strict regulatory" attitude over the years was concentrated on May 22 in the investigations and proposed penalties for leading platforms, sending a clear signal: the previously tolerated business model is undergoing systematic liquidation. While specific penalty amounts and details have not yet been disclosed, the biggest change is actually occurring at the expectation level— the compliance uncertainty for mainland investors participating in Hong Kong and U.S. stocks through offshore brokerages has suddenly magnified. The previously taken-for-granted path of easily buying U.S. stocks and scanning Hong Kong stocks is now marked with a higher regulatory risk tag.

Investor Panic Over Hong Kong and U.S. Stock Accounts: What Investors Fear Losing the Most

Within a few hours of the regulatory news breaking, brokerages took the initiative to reassure clients. Futu Holdings emphasized in an announcement that current business operations are normal, with the proportion of asset clients from mainland China having dropped to 13%, indicating that they have been "streamlining" this most sensitive area over the past few years. Meanwhile, Futu reiterated that it has completely stopped opening accounts for applicants with mainland Chinese identities and is actively combating fraudulent account opening behaviors, stating that it will push forward compliance rectifications as required by regulators. Changqiao Securities responded by emphasizing license and fund safety, stating that its licensed entities are regulated by the Hong Kong Securities and Futures Commission and other offshore regulatory bodies, with client funds completely isolated from the company's operational funds, with U.S. stocks held by DTCC and Hong Kong stocks held by HKSCC, and that clients enjoy protections under the Hong Kong Investor Compensation Fund. This entire set of wording points to the same goal: repeatedly confirming to the natural persons behind the accounts that the positions and funds they currently see are temporarily safe, visible, and verifiable.

However, in the minds of investors, the real questions are more direct than what is stated in the announcement: will accounts suddenly become unable to trade? Will assets be passively liquidated, transferred, or even "utilized"? One side is the grand narrative about whether cross-border business operations are legal and compliant, while the other side is the minutiae of whether the app can place orders normally and whether there are restrictions on deposits and withdrawals. The reality is that, to date, there is no evidence showing that existing client assets are being directly disposed of or frozen on a large scale; regulators have not published specific penalty amounts, details, or execution timelines either. The market is more about anticipating future regulatory paths rather than pricing risks that have already occurred with assets. In this period of information asymmetry, treating the worst-case scenario imagined as a predetermined fate is not only baseless, but it also easily amplifies panic. The truly rational posture is to acknowledge the existence of uncertainty before the specifics are finalized, but not to presume the outcome.

On the Same Day, ONDO Surged 7%: Coincidence or Flight to Safety?

On the very day that cross-border brokerages were announced to be under investigation, the market for ONDO, one of the representatives of the RWA track, showed a completely different picture: surging approximately 7.3% for a short time, peaking at about $0.44, with a 24-hour increase of about 7.32% (according to a single source). The news and price curve almost overlapped on the timeline, making it easy to connect the two into a story of "funds leaving brokerages and entering on-chain assets." However, based on publicly available information, this connection currently remains in the narrative realm rather than being verified by data as a fund migration.

The microscopic aspect of emotions comes from a case amplified by the media: a trader reported earning approximately 170% in weekly returns in this round of ONDO price movements. However, the scale of positions, leverage multiples, and entry and exit rhythms behind this number lack detailed disclosure, and we cannot infer a macro conclusion that "the entire market is heavily betting on ONDO." It is more like a natural pursuit by short-term funds chasing a new narrative amid rising regulatory uncertainties: while the future path of cross-border brokerages remains unclear, the price of RWA concept tokens offers an immediately visible space for volatility. In the absence of hard evidence such as on-chain fund flows or institutional position adjustments, attributing this 7% surge in ONDO merely to regulatory events essentially remains storytelling through coincidence, while what can genuinely prove whether funds are migrating will still be the quantifiable fund flow and changes in position structures in the future.

Traditional Channels Tighten, RWA Replacement Narrative Takes Center Stage

In this round of emotional fermentation, Ondo Finance's identity has been highlighted anew: it is widely regarded as one of the representative projects of RWA (Real World Asset Tokenization), focusing on "bringing traditional assets like U.S. Treasury bonds and money market funds onto the blockchain" to create yield products that can circulate in the crypto market. For many investors, this sounds like a middle ground between Wall Street and the on-chain world—underlying assets remain familiar Treasury bonds and money market funds, yet the shell transforms into tokens that can be traded 24 hours a day, thus naturally fitting into the imaginative framework of "potential compliant alternatives." As traditional cross-border securities channels come under pressure, and the account opening and trading paths of brokerage apps become full of variables, media and markets began to ask: since you can’t go to U.S. brokerages offline and online cross-border accounts are tightening, could a chain channel that packages U.S. assets as tokens become a new outlet?

It is this narrative that has pushed RWA into the spotlight. For some participants, RWA appears to simultaneously meet three key criteria: real-world assets, USD-denominated yields, and technically cross-border accessibility, seeming like a "hedge" against the tightening of traditional channels. However, one point that has been actively ignored in this narrative is that there are also regulatory restrictions on direct participation in overseas crypto asset trading by individuals in mainland China; RWA products do not exist in a "vacuum" outside of regulation. For mainland investors, even if the underlying asset is U.S. Treasury bonds, the methods of participation after being packaged into tokens, the routes for fund inflows and outflows, and the compliance boundaries still lack clear guidance. The so-called "alternative investment channels" remain more in the realm of narrative imagination at the expectation level rather than being validated as realistic and feasible solutions.

The Tug of War Between Regulation and Crypto: Where Will Funds Go Next?

Linking the investigation of cross-border brokerages with ONDO's surging rise is the most tension-filled part of this market narrative and also the most easily misinterpreted: on one side is the regulatory upgrade of the Securities Regulatory Commission’s investigation and pending penalties, while on the other side is the story of ONDO's short-term surge of approximately 7.3% on May 22, with claims of individual trader weekly returns reaching as high as 170%. The two are closely aligned on the timeline but lack on-chain data or institutional fund flow evidence proving a direct causal link between them. What currently seems more like an emotional projection and short-term game based on the "regulatory storm—crypto safe haven" template, rather than large-scale asset migration that has already taken place; the reality is that there is no systematic evidence indicating that funds are being withdrawn on a large scale from cross-border brokerages and flowing into the RWA track. Token prices reflect more expectations and premiums rather than actual allocation behavior that has taken place. What truly deserves tracking next is not who will double their bets on ONDO in the next round, but three slow variables: first, how subsequent cross-border regulatory documents will refine execution paths and the scale of penalties; second, how platforms like Futu and Changqiao will adjust in terms of account openings, existing clients, and business structures; third, whether there will be substantial changes in compliance actions, institutional participation, and funding composition of RWA projects like Ondo Finance, as these will sequentially determine where funds will ultimately land.

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