Shares of Hong Kong-listed fintech firm 51 Credit Card Inc. plummeted more than 35% after the company’s offices in the eastern Chinese city of Hangzhou were raided by police on Monday morning, according to Chinese media reports.

Why it matters: The move is part of a wider regulatory clampdown in an effort to lower risks in the financial sector, which has extended to the big data businesses. Chinese regulators have increased scrutiny of data sources and use.

Details: Around a hundred police officers stormed 51 Credit Card Inc.’s Hangzhou office on Monday morning and several employees related to the case were taken away for questioning in 12 police vehicles seen parked outside of the building, Chinese financial news outlet Sina Finance reported.

  • The company was not available for immediate comment.
  • Company CEO Sun Haitao was taken in for questioning on Sunday.
  • In a document circulating on microblogging platform Weibo, a bank accused the credit card firm of scraping client data without their authorization.
  • Shares of the credit card company fell nearly 35% by market close on Monday.

Police raid Chinese blockchain project GXChain

Context: Hangzhou-based 51 Credit Card is one of China’s largest online credit card issuance and management platforms in the country in terms of monthly active users. It services individuals, banks, and credit platforms and had 75.9 million users as of end-2018, according to its website.

  • There have been multiple crackdowns on big-data business activities in the area over the past two months.
  • Last month, police raided Hangzhou-based GXChain, a blockchain startup that provides decentralized solutions for internet finance and banking, for the company’s business activities related to the scraping and processing of sensitive information including personal credit data.
  • In the same month, a senior executive of Hangzhou-based big data risk management firm Moxie Data was taken into custody for questioning. The investigation was related to the company’s sources and use of data, according to reports from Chinese media.

Nicole Jao

Nicole Jao is a reporter based in Beijing. She’s passionate about emerging trends, news, and stories of human interest within the world of technology. Connect with her on Twitter or via email: nicole.jao.iting@gmail.com.

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