Crowdfunding needs to be regulated in order to prevent money from being used for activities endangering national security, Secretary for Financial Services and the Treasury Christopher Hui wrote on Thursday.
In a blog post, Hui said Hong Kong lacks laws to regulate crowdfunding in general, adding that the practice has emerged online more frequently in recent years, making policing more difficult.
Hui said one of the biggest risks of unregulated crowdfunding is that money could be used to fund illegal activity. Such platforms are sometimes used for money laundering, he claimed: “We need to formulate an appropriate regulation system, prohibiting any person or organisation from raising funds directly or indirectly for activities that endanger national security by ways of crowdfunding. We also need to cut the crowdfunding chains of fugitives who fled Hong Kong,” Hui wrote.
Activists, or friends of democrats, in Hong Kong and abroad have turned to US-based funding platform Patreon to raise funds. The site has hosted profiles from democrats Lam Cheuk-ting, Ventus Lau, Ted Hui, Au Nok-hin and Gwyneth Ho, as well as activist-academic Benny Tai.
Secretary Hui proposed licensing or registering crowdfunding platforms operating in Hong Kong, requiring them to verify the purposes of fundraising projects. He also suggested making crowdfunding organisers register or obtain a permit beforehand. Hui also touted the idea of introducing a mechanism for reporting suspicious transactions.
Hui said the government will conduct public consultations this year, but he did not provide a detailed timetable.
Authorities have cracked down on several crowdfunding initiatives in relation to the 2019 anti-extradition law protests and unrest.
Radio host Edmond Wan Yiu-sing, better known as “Giggs,” was arrested in February last year on a charge of “seditious intent.” Wan had called for donations to support Hong Kong protesters who travelled to seek refuge and study in Taiwan.
Police have also frozen the assets of Spark Alliance, a non-profit group that raised money to provide financial aid to Hong Kong protesters, accusing the group of money laundering.