Is Webull Legitimate?
Have you ever thought about opening a brokerage account with Webull? Maybe you’re curious about Webull’s credibility and security? If so, read on, as we’ve done the research and have the answers to your questions! You’ll learn about who owns Webull, its background as a company, whether it’s a legitimate brokerage firm, how your money and investments with Webull are insured, and more.
Who owns Webull?
Webull is a privately held company owned by Fumi Technology, a Chinese holding company with backing from private equity in China.
In 2017, Webull Financial LLC was founded by Wan Anquan, formerly of Alibaba Group, one of the world’s largest companies by market capitalization. Anquan owns roughly one-third of the company, with Xiaomi and Shunwei Capital the next two largest shareholders.
Since 2018 Webull has had a mobile app available for both Android and iOS. In 2020, the company launched a robo-advisor and exceeded 12 million registered users. Webull has benefited from the meme stock era, with more than a million app downloads during the week of the GameStop short squeeze.
It is said that Webull is considering going public at a rumored valuation of $400 million. This would not be surprising, given the many fintech (financial technology) companies that have gone public recently or soon plan to (e.g. Robinhood, SoFi, Acorns).
Is Webull Safe?
Webull is the fastest growing discount broker that have appealed particularly to younger and less experienced investors.
As such, many people consider it an alternative to Robinhood, a superior alternative even. Indeed,
Webull offers many compelling features that Robinhood does not, such as advanced trading platform, technical analysis, virtual
trading, and more cryptos. Webull is thus better suited in many ways for more experienced and savvy traders.
That said, Webull has certain downsides, primarily the inability to trade mutual funds, bonds, or OTC stocks, which may deter many investors who want to have a more diversified portfolio with just one broker and/or access to OTC stocks.
If you’re primarily interested in trading stocks and ETFs, Webull is a very good choice for you, particularly if you want to take advantage of their more robust trading and analysis tools.
Webull is also catering to those interested in cryptocurrency, the hottest asset class in recent times. You can now trade crypto 24/7 on Webull with $0 commission and just a $1 minimum deposit.
You can also take advantage of Webull’s free stock promotion,
which guarantees you at least one stock worth up to $1,000. If you happen to have a lot of friends interested in joining Webull, you can refer them and get free stocks too. And hey, you might just get lucky. (But you should know that most of the shares are not worth much.)
Webull continues to update its app, and has numerous upgrades, including the following:
More Cryptos – Webull now offers these coins: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), Stella Lumens (XLM), Ethereum Classic (ETC), Cardano (ADA), Shiba Inu (SHIB), Basic Attention Token (BAT), Chainlink (LINK), Uniswap Protocol Token (UNI), Algorand (ALGO), Polygon (MATIC), Sushi (SUSHI), Avalanche (AVAX), REN (REN), Solana (SOL), Cosmos (ATOM), Decentraland (MANA), Fantom (FTM), The Graph (GRT), CurveDAO Token (CRV), Loopring (LRC), Tezos(XTZ), USD Coin (USDC), Aave (AAVE), Crypto.com Coin (CRO), yearn.finance (YFI), Apecoin (APE), Chiliz (CHZ), Synthetix(SNX), Gala (GALA), BNTUSD (BNT), COMPUSD (COMP), ENJUSD (ENJ), Maker (MKR), FILUSD (FIL), and ICPUSD (ICP)
Learning Tools – There’s information now accessible for additional insight into your investment choices
Message Center – Messages can now be customized so that you can organize information more effectively in different categories
New Account Homepage Design – This page allows for easier access of information
Financial Report Analysis – There’s now detailed financial information available visually so you can make faster, more informed decisions
Another cool feature is that Webull provides investors access to upcoming IPOs (initial public offerings). There’s a minimum $100 account balance and $100 minimum order for these offerings, however.
Is Webull Legitimate?
Webull Financial LLC is regulated by the U.S. Security and Exchange Commission (SEC) and incorporated in the state of Delaware since 2017. Their Reporting File Number is 008-69978.
Webull Financial LLC is also registered as a brokerage firm with FINRA (New York district office) and its CRD# is 289063.
Webull does not have any disclosures, which is generally a good sign!
In short, Webull is a legitimate brokerage firm, with a focus on making investing accessible for new investors in particular. Webull had grown to over 12 million individual customer accounts.
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Is Webull Secure?
In terms of cybersecurity, Webull unfortunately does not have this information on their website. Nonetheless, it would be extremely surprising if they don’t use industry-standard encryption to protect customer data.
Is it Insured?
As for protecting your money, you are in good hands with Webull as it’s a member of SIPC (Securities Investor Protection Corporation). This means that your securities are covered up to $500,000, including up to $250,000 for cash claims. According to the Webull website, they also share that their clearing firm, Apex Clearing, maintains an additional insurance policy. This provides additional coverage for securities and cash up to $150 million in total, with maximum limits of $37.5 million for any one customer’s securities and $900,000 for any one customer’s cash.
So, thanks to SIPC coverage, your cash and securities are as protected with Webull as with any other major broker. In fact, possibly even more so thanks to their additional insurance policy through Apex Clearing.
If you’re a cryptocurrency holder, however, bear in mind that cryptocurrency investments held through Webull are not protected by SIPC.
Also, as Webull is not a bank, it is not a member of the FDIC (Federal Deposit Insurance Corporation), which insures consumer deposits in U.S. banks.
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Wrapping up: Is Webull a Scam?
All in all, Webull is not a scam. Although relatively new as a broker compared to many more established players, your money is protected and insured through standard financial insurance (SIPC).
Webull is a good option, particularly for intermediate to advanced investors. It can also help newer investors learn a lot about investing thanks to their educational resources and robust analysis tools.
Ultimately, if you begin investing with Webull, you can rest assured that your money is as safe with them as with any other broker-dealer out there, thanks to the SIPC coverage for your investments and cash holdings in your investment accounts.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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