Regulation of crowdfunding needed to plug gaps in laws, says Hong Kong's John Lee as public consultation launched

Regulation of crowdfunding activities is needed to fill in gaps in existing laws, Chief Executive John Lee has said after the government launched a public consultation on potential legislation.

Lee, speaking to the press ahead of the weekly Executive Council meeting on Tuesday, said that there were “gaps” in existing laws regarding online crowdfunding campaigns.

“That’s why we need to have a strong regulation over these gaps,” said Lee. The public consultation, launched on Monday, will last for three months.

The Financial Services and the Treasury Bureau proposed establishing a Crowdfunding Affairs Office to monitor and to “centrally process and coordinate regulatory and administrative matters” linked to crowdfunding activities.

The consultation also suggested requiring all campaigns that raise funds from Hong Kong people or people in Hong Kong to file an application to the office prior to launching the campaign.

The organiser would have to disclose the aim and arrangement of the crowdfunding campaign, use a local bank account, and maintain financial records.

Applicants would also have to declare that the campaign would not involve “any activities that would jeopardise national security or any unlawful activities.”

Under the proposed regulations, unauthorised crowdfunding campaigns – including those that carried on despite being banned by the Crowdfunding Affairs Office, and campaigns suspected of jeopardising “public interest, public safety, or national security in Hong Kong” – would be outlawed.

Hinson Hung crowdfunding campaign — A crowdfunding campaign launched by now-disqualified district councillor Hinson Hung’s crowdfunding campaign. Photo: Website screenshot.

Crowdfunding has been a popular tool for pro-democracy politicians and activists to raise funds, especially for those who have been charged under the national security law or in protest-related cases, to raise money to pay their legal fees.

The government has also cracked down on campaigns which claimed to support protesters from the 2019 extradition bill protests.

Edmund Wan, an online radio host better known as “Giggs,” was jailed for two years and eight months in prison after pleading guilty to money laundering and sedition. Wan had called for donations via his website and on social media to support the living expenses of Hong Kong protesters who had travelled to Taiwan to seek refuge or study.

Last month, Cardinal Joseph Zen was among six people who were fined over failing to register the 612 Humanitarian Relief Fund as a society, as required by the Societies Ordinance.

The fund, which folded in August last year, provided financial support for those arrested or injured during the 2019 protests.

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