A part of me remains just a little skeptical about the national-security perils of TikTok even as the consensus builds that the wildly popular short-video app is an existential threat because its parent company is Chinese.
The worry in DC and beyond, of course, is China’s vast surveillance state that has the final word on the operations of every Chinese company.
In the case of TikTok, it’s sucking up swaths of data from all those tweens who signed up to post TikToking dance videos.
Not exactly high-level spy craft, IMHO.
So with the same degree of skepticism, I am approaching the latest China-inspired scare among some elements of our ruling class (this time, members of Congress, including Sen. Tommy Tuberville and Rep. Jim Banks).
It centers on concerns that increasingly popular discount brokerages owned and operated by Chinese parents are also possibly spying on us.
I am talking about Webull and Moomoo.
Odd names, to be sure, but they are becoming increasingly thorny competitors to American discount brokers (Schwab, Robinhood, ETrade) for US retail traders.
They’re also emerging as an increasingly legitimate national-security concern if you listen to Tuberville and Banks because, like TikTok, they too collect data from their customers that are possibly fed into the Chinese spy apparatus.
And when you break it down, you can see how the Webull/Moomoo threat appears more pernicious than TikTok’s, involving amorphous stuff like search history and “biometric identifiers” — identification characteristics gleaned from voice recognition and earlobe size.
As most people know, whenever you trade a stock or buy any type of investment, you need some sort of broker to complete the transaction.
Brokers ask for a lot of hard info, much more than TikTok can ascertain.
It includes Social Security numbers, age, mailing addresses, etc., pretty sensitive stuff, which in the wrong hands could lead to identity theft and much more.
I know I said I’m somewhat dubious about TikTok’s relevance to Chinese spies because I’m not totally convinced there is spycraft value in ripping off the identity of some random kid.
That said, I put nothing past the Chinese surveillance state, whether it’s sending spy balloons over US military bases, using TikTok data or anything else at its disposal to gain an edge.
And if you know anything about China Inc., the Chinese Communist Party really is in control of every Chinese company.
My full appreciation of the CCP’s dominance occurred about a decade ago covering the IPO of Alibaba, a massive e-commerce outfit in the mold of Amazon but headquartered in China.
In the deal docs, there was a not-so-subtle risk factor about how the Chinese government “exercises significant control over China’s economic growth . . . providing preferential treatment to particular industries and companies.”
Later, its founder, Chinese entrepreneur Jack Ma, disappeared for months after mildly criticizing the CCP because, well, that’s what they do in a surveillance state.
In other words, giving Chinese spies access to Social Security numbers and reams of personal information on American citizens — if that’s what’s happening — with regard to Webull and Moomoo is a recipe for disaster, certainly more of a national security concern than anything gleaned from the TikTok app.
And this will add to agita: front-line regulation of all registered broker deals is divvied up between two feckless entities, the Financial Industry Regulatory Authority (FINRA) and, of course, the Securities and Exchange Commission run by Gary Gensler.
Losing sight of mission
They’re known as Wall Street’s top cops.
Both cops, however, appear to be taking extended coffee breaks in recent years as financial pump-and-dump schemes run wild on social media.
Gensler in particular is focused on weird non-core stuff like how to force companies to figure out their carbon footprints.
Tuberville, Banks & Co. too are suspicious that neither are doing their jobs in this matter. In a recent letter to both agencies, they demanded information by May 31 about how the agencies are inspecting these brokerage operations and making certain sensitive customer data isn’t being siphoned by Chinese spies.
It’s particularly worrisome, they say, at Webull, which has confirmed that its technology team is in Hunan, China, and a number of its registered reps have addresses on the mainland — all out of the reach of US inspectors.
Again, I want more evidence that Webull and Moomoo are really up to no good.
I asked Moomoo for comment, and the firm assured me in a statement that “customer data is housed in encrypted form using cloud-based storage solutions provided by AWS [Amazon Web Services]. Specifically such data is stored in AWS US East Region.”
The company added: “Moomoo, like any other US company that is subject to US law and regulations, will comply with lawful demands for records from government and regulatory authorities. Moomoo and its parent company Futu have never received a demand for US user data from the Chinese government.”
Webull, on the other hand, didn’t return repeated calls and emails seeking comment.
Ditto for FINRA and the SEC.
Both agencies also appear to be stiffing Tuberville and Banks, who have yet to get the information requested about how the agencies can assure US customers of these firms that their data is safe, as this column goes to press.
None of which is confidence-inspiring.
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