A New Cross-Border Route via On-Chain US Stocks
Following the regulatory clampdown on platforms like Futu and Tiger Brokers, mainland investors have found a fresh pathway to US equities through on-chain instruments. By using stablecoins for funding and withdrawals, these transactions operate outside conventional banking systems, evading the existing cross-border capital flow monitoring infrastructure. Offshore exchanges leveraging decentralized architectures are not subject to CRS reporting standards, leaving tax and financial authorities with limited visibility into holders’ positions and trading activity.
The complication deepens as law enforcement assistance and asset freezes become more difficult due to the anonymity of on-chain addresses and the distributed nature of such exchanges. The traditional regulatory trilogy of banks, brokers, and tax authorities has developed blind spots. Consequently, tracking capital flows and enforcing cross-border compliance now faces unprecedented challenges, potentially accelerating the need for a dedicated regulatory framework for crypto-based asset flows in China.