Approximately 37 million individual seahorses are traded each year, mostly to China via Hong Kong for use in traditional Chinese medicine. This occurs despite national and international laws and export bans.

Approximately 95 percent of seahorses are exported from countries with trade prohibitions. All seahorses are listed under CITES Appendix II, meaning non-detrimental trade can in theory continue. However, several countries have banned the trade outright, while others are under recommendations by CITES to suspend trade.

An important import hub, Hong Kong does not provide legal protections to seahorses but only requires an export permit from the country of origin. According to NGO reports, the authorities rarely examine export permits to determine legality.

As a result of the huge demand, seahorse traffickers are expanding their geographic scope, targeting populations in Europe, Africa and Latin America after depleting populations in Asia.

The scope and scale of environmental destruction associated with seahorse trafficking present companies engaged in the production of medicines and other products using seahorses as ingredients, as well as investors, with significant ESG risks. Legal risks related to the largely illegal nature of the trade present further risks to exporters, importers, production facilities, transporters and financial institutions.