Hong Kong wants to regulate crowdfunding



The Hong Kong government on Monday announced plans to ensure all crowdfunding activities must obtain official approval following a crackdown on pro-democracy protesters who use donations to pay for their legal defences.

Online crowdfunding has been popular with the city’s pro-democracy advocates to pay for the legal and medical costs of those arrested during the large and often violent protests of 2019, as well as the cost of living for those who fled abroad.

But most projects have been shut down or have been forcibly shut down as Beijing and local authorities tighten their grip.

Crowdfunding Approval

The proposal, unveiled on Monday, will prevent activities that are “fraudulent, endanger the public interest or endanger public and national security in the name of crowdfunding,” a government spokesman said.

All future crowdfunding activities, online or offline, must first be approved by a crowdfunding activities office, “regardless of their purpose or location”.

“Illegal” crowdfunding projects will be stopped and prosecuted by law enforcement, according to the proposal.

Officials are also considering a registration system for online crowdfunding platforms even if they are not based in Hong Kong, but they have not given details on enforcement.

The plans will face a three-month public consultation before going into a legislature that has been freed from opposition since the 2019 protests.

Finance Minister and Treasury Secretary Christopher Hui wrote on Saturday that Hong Kong has no regulatory regime for crowdfunding and projects must be “transparent and accountable”.

The proposal provides exceptions and special provisions for lottery sales, physical fundraising events, charity events and crowdfunding events that are “widely recognized by society”.

fine

Last month, trustees and the secretary of the now-defunct 612 Humanitarian Relief Fund, which raised funds to help protesters, were fined by a court for failing to properly register their group.

The fund disbanded last year after the National Security Police ordered it to release operational details, including information about its donors and beneficiaries.

Among the fund’s defendants was 90-year-old Cardinal Joseph Zen, one of Asia’s oldest Catholic bishops.

Prosecutors have also raised money laundering allegations in pro-democracy crowdfunding cases.

In October, a trio of Hong Kong activists said online payments firm Stripe had gone out of business after using crowdfunding to pay legal costs stemming from lawsuits against police.

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