China’s tightening of rules on cross-border trading has sent shares in online brokerage firms Futu Holdings Ltd and UP Fintech Holding Ltd tumbling, hitting hedge funds and global investors with significant losses according to a report by Bloomberg.

The selloff came after Beijing announced a series of measures targeting illegal overseas trading activity by Chinese investors, alongside specific regulatory actions against major online brokers that facilitate access to offshore markets.

Futu’s American depositary shares plunged nearly 28% in a single session, while Up Fintech—best known for its Tiger Brokers platform—fell about 25%, wiping out substantial market value in both companies.

The sharp decline has raised concerns among institutional investors with exposure to the sector. Hedge fund Aspex Management reportedly held close to a 5% stake in Futu at the end of the first quarter, which would have translated into a paper loss of roughly $156 million following the drop.

Other large investors, including Hillhouse Investment Management and Capital Group, also had exposure to Futu and Up Fintech at the time, though it was not immediately clear whether their positions had changed ahead of the regulatory announcement.

Regulators have also warned brokers including Futu, Up Fintech and Long Bridge Securities that they could face combined penalties exceeding $330 million as part of the broader enforcement push.