Chinese hedge funds were looking forward to a holiday break from the market turmoil when trouble started brewing last month. One manager had his short-selling orders abruptly rejected by brokers. Another was cut off from the stock market completely. Regulators turned up on trading floors at multiple funds to monitor transactions in person.

As one fund put it, three sessions of chaotic trading "felt like a whole year to us.”

The scenes, extraordinary even by the standards of a market that has long operated under the Chinese Communist Party’s shadow, played out in recent weeks in a clampdown that’s rewriting the rules of computer-driven trading in China. The country’s once-booming quant industry has become the latest casualty of Beijing’s campaign to stop a $4 trillion selloff in stocks.