Futu Holdings (NASDAQ:FUTU) stock sinks 22% and UP Fintech (NASDAQ:TIGR) drops 16% in premarket trading in the U.S. after the Chinese central bank warns that online brokerages that aren't licensed in China are operating illegally if they're serving Chinese clients through the internet.

"Cross-border online brokerages are driving in China without driver's license. They're conducting illegal financial activities," Sun Tianqi, who heads the Financial Stability Department of the People's Bank of China, said in a speech, Reuters reports.

Sun didn't name Futu (FUTU) and UP Fintech (TIGR), but pointed out that 80% of the accounts of a brokerage firm registered in the Cayman Islands were opened by mainland China customers, while a Hong Kong-registered firm had 55% of its clients from the mainland.

Earlier this month, the state-controlled People's Daily said Chinese online brokerages are facing regulatory risks with the implementation of China's data privacy law.