Last November, Chinese fintech giant Ant Group found itself squarely in the crosshairs of regulators. First came new rules on microlending, then Ant Group's $34.4 IPO was scuttled. And now officials are digging deep into Ant's IPO, according to the Wall Street Journal.

It seems that China's Securities Regulatory Commission wants to know if any officials may have greased the wheels to push Ant's IPO forward. They also want to know if certain state-owned firms stood to benefit from the company's debut.

The IPO's derailment, and its subsequent probe, are just the latest moves in China's ongoing campaign to reign in the excesses within its consumer lending industry.

"The Ant IPO incident shows that certain rules and regulations are still lacking as we develop the financial markets," said an advisor to China's State Council, quoted by the WSJ. "Financial security must be ensured."

According to sources, trustbusters launched the probe in earnest after Xi Jinping singled out the financial sector in a January speech before the Central Commission for Discipline inspection.

Of particular concern for investigators is the speed at which Ant Group managed to clear regulatory hurdles.

For instance, On August 25, the company submitted its prospectus to China's STAR market and the Hong Kong exchange. In less than a month, officials in Shanghai completed their review of Ant's application, which effectively allowed them to cut in line ahead of earlier applicants.

Regulators are also looking into how certain sovereign wealth funds were able to invest in Ant. For example, China Investment Corp managed to buy a stake in Ant, which directly contradicts the group's mandate to invest overseas.

So far, the probe has resulted in more stringent listing requirements on China's STAR exchange. Meanwhile, Ant Group will transition into a financial holding company which will be held to the same regulatory standards as a traditional bank.

Should Ant go forward with an IPO in the future, it's unlikely the company will receive a similar valuation due to new micro-lending requirements that all but cut the feet out from under Ant's business model.

The new rules, drafted a day before officials canceled Ant's IPO, impose a 30% co-lending requirement on microlenders in addition to higher leverage ratio's for online lenders, according to Bloomberg News.

Given that Ant only directly financed 2% of the ¥1.7 trillion in loans it doled out last year, the company may have to underwrite as much as ¥520 billion in consumer debt, Bloomberg reports. It may also have to treble its net assets to ¥104 billion from its current level of ¥35 billion.

It seems that the regulatory template in China going forward is to treat all companies that lend as traditional banks, subject to the same oversight and stringent capital requirements. Whether these new standards are good or bad is entirely subjective.

No doubt though this trend could have a chilling effect on the country's once burgeoning fintech industry.

"China's push to rein in Ant could end up limiting developments in financial technology," Ji Shaofeng, a former banking regulator, told the Wall Street Journal. "Putting everything under the scope of a financial regulator tends to discourage further technological innovation."