Hong Kong crowdfunding activities to be regulated so they do not endanger national security
- Public consultation later this year aims to scope fundraising activities that require regulation
- Crowdfunding raises money from a large number of people who contribute relatively smaller amounts
The Hong Kong government is considering regulating crowdfunding campaigns in a bid to prevent money being used for activities that endanger national security or other illegal purposes.
Typically using digital platforms, crowdfunding raises money from a large number of people who contribute relatively smaller amounts, with the promise of delivering products, services or equity to its funders.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said on Thursday that a public consultation was in the pipeline for later this year to examine whether such platforms needed to be registered and required to conduct due diligence ahead of campaigns.
“Should fundraisers be asked to be registered or obtain permission before raising funds, as well as providing clear, accurate and fair disclosure and reports to fund providers?” he said on his official blog.
“How to establish a reporting system to identify and report suspicious transactions to prevent the risks of various illegal acts such as endangering national security, money laundering and raising fund for terrorists?”
Hui explained that a regulatory system was needed to keep crowdfunded money from fuelling activities that “jeopardise national security”, and cut off their pipeline into funds “set up by criminals that fled overseas”.