DiDi Global (DIDI  ) has been asked to delist from foreign exchanges by China's cybersecurity regulator. Leadership at the company has been prompted to plan to either privatize or list in Hong Kong.

China's Cyberspace Administration is reportedly asking for the company to pull out of foreign markets over its handling of "sensitive data." Like many tech firms, DiDi collects user data from its customers to aid in product development. The Cyberspace Administration is apparently balking at the prospect of DiDi "leaking" this data to foreign markets.

Currently, DiDi is stuck with either privatizing or dual listing its shares in Hong Kong instead. The latter would allow foreign financiers to continue to invest in the company, though with much more oversight by the Chinese government. The former option could enable many investors to "cash-out" their investments while negating the losses of DiDi's lackluster IPO.

Privatization would provide a payout price at the firm's IPO price of $14, or even above it. Doing so would help the firm avoid lawsuits from frustrated investors. This looks to be the only real way that investors might recoup their costs on DiDi if it is forced to delist.

Even if Chinese regulators change their minds, the delisting threat is not entirely over for DiDi. The firm's handling of data the Chinese government considers "sensitive" has made it and other Chinese-owned companies resistant to U.S. government audits.

With the Holding Foreign Companies Accountable Act signed into law earlier this year, resistance could result in the SEC delisting non-compliant firms. Companies have some time to comply with new disclosure requirements, but the growing rift between the U.S. and China doesn't leave them much wiggle room.

DiDi shares are recovering after taking a few plunges over the last week. DiDi stock slipped 1.7% on Tuesday, but surged back 6.6% by noon on Wednesday.