This article provides critical and analytical views on legal regulation to achieve a balance between FinTech innovation, risk prevention, and financial stability, by focusing on the trend of FinTech firms entering the financial-services industry and the associated regulatory and legal challenges that are already arising in China. It adopts a balanced approach as a theoretical-analysis perspective, weighing various considerations, and proposes the policy option of FinTech regulation under the principle of interest balance. The analysis aims to contribute new insights to an ongoing debate in China on the relationship between legal and regulatory reform, FinTech innovation, and risk prevention. This article argues that legal challenges, rather than technical problems, remain the key obstacles to effective FinTech regulation. Our proposed hypothesis seeks to explain how a legal regulation achieves balancing the competing interests between FinTech innovation, risk prevention, and financial stability in the booming of China’s FinTech. Finally, this article proposes the implementation of goal-oriented responsive regulation by improving the legal framework of FinTech regulatory regimes through policy option.