Japan's Financial Services Agency (FSA) has suspended Moomoo Securities from opening new accounts for three months, effective June 19 to September 18, 2026, after finding serious compliance and control failures. The brokerage, a unit of Nasdaq-listed Futu Holdings, had rapidly expanded its user base to over 2 million downloads in Japan by offering low-cost US stock trading via a smartphone app.
The suspension follows an investigation by the Securities and Exchange Surveillance Commission that uncovered multiple violations. Regulators found that Moomoo incorrectly labeled 78 US exchange-traded funds and notes as eligible for Japan's NISA tax-free investment program, causing customers to purchase products that didn't qualify. The company also failed to proactively contact affected clients and restore their annual investment allowances. Additionally, Moomoo restricted domestic stock transfers, limiting clients' ability to move Japanese shares to other brokerages.
The FSA also flagged anti-money laundering shortcomings: Moomoo neglected to review over 1,500 rejected or flagged account applicants, treating screening obligations as only applying to approved accounts. Suspicious transaction checks were left unresolved for extended periods, and required reports weren't filed. Cybersecurity controls were deemed weak, with management lacking a full inventory of key transaction systems and insufficient vulnerability checks.
Alongside the suspension, the FSA issued a business improvement order requiring Moomoo to strengthen internal controls, clarify management responsibility, and submit a recurrence prevention plan by July 21. The regulatory action underscores Japan's tightening oversight of digital finance and foreign-owned online brokerages, converting Moomoo's rapid growth into a critical compliance test.
