Who will benefit from the supervision of the China Securities Regulatory Commission? Is it RWA or a pure overseas brokerage firm?? Where will the customers of Futu, Tiger, and Changqiao go! Many friends ask me if this is good for RWA, good for listing on the US stock market, and if securities firms in Hong Kong and other places will also clear mainland users. So where will these users go. Let me share my viewpoint. Firstly, I believe it is beneficial for RWA, but this benefit is very limited. Why do you say that? The target of this crackdown is securities firms that have legal licenses overseas but operate without licenses in China. As I mentioned earlier, the essence of the crackdown is on Chinese funds going abroad without licenses, so there are two key points here. The first one: working capital in overseas securities firms. As an aspect of overseas fund allocation, users' demand is to achieve overseas fund allocation through buying and selling US stocks, US bonds, ETFs, etc. That is to say, for the first type of users, buying products such as US stocks is not very important. What is important is having funding. These users actually buy more ETFs, indices, and bonds mainly for asset stability, which can be used when they need to use US dollar assets. Some users even use securities firms as a "bridge". The second one is to truly engage in US stock trading. There are also many users in this group, especially after the development of AI, there has indeed been a trend of Chinese investors allocating technology and AI stocks. The demand of this group of users is compliance, compliance, and compliance. Compliance 1 refers to the compliance of fund inflows and outflows. Although supervision in this area is relatively strict, there are indeed channels for compliance. Additionally, it should be noted that although individuals have an annual limit of $50000, it cannot be used for capital projects that have not yet been opened up, such as buying houses overseas, securities investment, purchasing life insurance, and investment return dividend insurance. That is to say, the $50000 quota can be used for tourism, studying abroad, medical treatment, visiting relatives, etc., but at the official level, it cannot be directly used for stock trading. Compliance 2 refers to the compliance of securities firms themselves. Stocks need to be deliverable, eligible for dividends, and enjoy the rights of all shareholders, not just tracking stock prices. Compliance 3 refers to the regulatory compliance of securities firms themselves. Adequate supervision proves that funds stored in securities firms are safe, that transactions are legal, and that one's assets are protected by local laws. This is what most US stock investors are concerned about, that is to say, whether it is the first or second type of users, the focus of US stock allocation is because the flow of funds is legal, and KYC and AML can be issued on the fund chain to prove that their money can flow globally. But currently, the RWA on the chain or the users targeted by the US stock on the chain may not necessarily be these users. Firstly, there are almost no active stocks of US stocks on the blockchain. Most platforms provide an index that tracks prices, meaning that some may have dividend rights, but it is difficult to enjoy the full equity of their holdings. On chain platforms that can achieve US stock delivery are almost non-existent. Secondly, through data from exchanges and various platforms, it can be seen that spot trading that tracks stock prices actually has very limited trading volume. More users are buying and selling contracts that track prices, and they are leveraged. Speaking of people, there are relatively few investors who actually buy Nvidia on the chain, but there are still many investors who open long and short Nvidia contracts, with a large amount of funds. This is because exchanges and platforms have more relaxed regulations, allowing users to directly open high leverage contracts, which is very exciting for some small partners. But for low-risk preference investors, it is quite difficult, so for on chain US stocks, firstly, the problem of fund allocation is difficult to solve. USDT and USDC still cannot complete all AML and KYC links. Secondly, for pure trading users, tracking prices and buying and selling stocks are still different, and there is a significant difference between being compliant and relatively loose. The bigger difference is that one can exchange Chinese yuan directly into US dollars or Hong Kong dollars at the bank for trading, while the other needs to be labeled as "illegal" to exchange for USDT and then trade again. In terms of promotion path, the latter will be more complex. Returning to the initial question, other securities firms in Hong Kong, even those with a major presence in Chinese Mainland, are likely to start to liquidate Chinese users, mainly under the control of the CSRC, unless they have no business in Chinese Mainland or have no diplomatic relations with China. Overall, I think the most beneficial aspect of this regulation is the platform that allows Chinese users to open accounts without being regulated by the China Securities Regulatory Commission. For example, pure American securities firms such as Jiaxin, Yingtong, and BIT are relatively safest because China has not implemented direct regulation, especially since CRS is not yet involved. These platforms should be the ones that users who are more concerned about after the three companies are cleaned up this time will choose to migrate, and compliant securities firms themselves can transfer their "tickets" to other securities firms. PS: It should be noted that the lack of direct regulation in China does not necessarily mean it is legal and compliant. It is just that China is currently unable to implement regulation. However, if users within the country engage in rebates and new customer acquisition activities on these exchanges, there are still risks involved. And I personally think that this group of users can flow into RWA in the cryptocurrency field and on chain US stock platforms, but it may be very limited.