While opposition lawmakers and some legal experts questioned the justification for the crackdown, a police insider pushed back, claiming prosecutors were not required to prove that actual proceeds of crime were involved. Police suspect the funds were used for personal gain and other illegal activities, including participation rewards for young protesters.

All four arrested were released on bail on Thursday night, including a 50-year-old man listed as director of a shell company at the centre of most of the financial transactions. HSBC closed the account of “Prime Management Service Limited” in November.

Police insiders said the account of the largely dormant company was reactivated around June, when it recorded more than 50,000 deposits totalling nearly HK$81 million, which led to their investigation in early October.

In a rare statement on Friday, HSBC, without stating names, explained its previous decision to shut down Spark Alliance’s account was only in accordance with international regulatory standards.

“Our decision is completely unrelated to the Hong Kong police’s arrest of the four individuals on 19 December 2019,” the bank said. “We closed the account in November 2019 following direct instruction from the customer. As we previously stated, the account has not been used for its stated purpose … To reiterate, our decision to close the account is categorically unrelated to the current Hong Kong situation.”

Police freeze HK$70 million raised by Spark Alliance for Hong Kong protesters

A source said it was not HSBC that reported the case to police.

There were mixed reactions from the protest movement on whether to target the banking giant.

More than 100 people joined a peaceful lunchtime protest opposite HSBC’s headquarters to lend their support to Spark Alliance.

“Support Spark Alliance, protect comrades!” they chanted, insisting police had no evidence to act against the fundraiser.

Radical activists have previously vandalised and petrol-bombed branches and ATMs of state-owned Bank of China.

Sunny Cheung Kwan-yang, former spokesman of lobbyist group Hong Kong Higher Education International Affairs Delegation, felt HSBC should pay the price for closing Spark Alliance’s account.

“We hope the US Congress can use the International Emergency Economic Powers Act to sanction HSBC which helped the autocratic Hong Kong regime to close down the bank account of a democratic foundation,” Cheung said in a Twitter post that was shared thousands of times.

Thousands of comments flooded HSBC Hong Kong’s Facebook page, expressing anger and disappointment at the bank.

“Simple yes/no question, have you reported to the police, and provided them with records?” wrote newly elected district councillor Timothy Lee Hin-long.

Spark Alliance has condemned police for what it called a smear campaign.

While police said the director who was arrested was the sole beneficiary of insurance products bought with the funds, raising concerns about donation money being misappropriated for personal gain, a source told the Post the insurance purchases were used purely to inject assets into the bank account to prevent its closure.

Former legal sector lawmaker Margaret Ng Ngoi-yee, one of the trustees of the largest fundraising platform for the protests, the 612 Humanitarian Fund, expressed shock over the police crackdown and complained that evidence was lacking.

“The government cannot stop volunteer lawyers from assisting frontline protesters, so they go and freeze the fund that is used to pay the lawyers,” she said, adding that using insurance as an investment package was not unheard of.

HSBC to close corporate account being used to support protesters

But a police source said there was no need to prove actual criminal activity, citing the top court’s landmark 2016 ruling on businessman Carson Yeung Ka-sing’s money laundering case.

“It held that it is unnecessary for the prosecution to prove the proceeds are in fact the proceeds of an indictable offence. It also reiterated that the proof of a predicate offence is not required,” the source said.

The source cited the “large variety of counterparties, large transactions and incommensurate financial pattern” as forming the basis of the police case against Spark Alliance, with further charges of theft and fraud possible.

A former money-laundering investigator suspected the fund included unsourced money disguised as crowdfunded donations.

“The group was not registered and no audit and tax was needed,” he said.

But veteran criminal defence lawyer Jonathan Midgley said prosecutors would still have to establish that the accused knew or reasonably believed the money they used were the proceeds of serious crime.

Meanwhile, thousands of protesters gathered outside the Lai Chi Kok Reception Centre in the rain to show their support for the 79 people who have been held at the detention centre since the anti-government protests began in June.

Organisers estimated 6,000 people had filled the pavement along Butterfly Valley Road and the surrounding side streets around the detention centre. Police said the crowd was 1,200 at its peak.

Rally-goers remained peaceful and chanted slogans in support of arrested protesters. Family members and significant others of arrested protesters read letters from those being held in detention.

The rally, organised by pro-democracy legislators and district councillors, had received a letter of no objection from the police. Lawmaker Fernando Cheung was among those who spoke.

“The young protesters have given up their youth to fight for our freedom, and we are here to tell them we will not forget them,” he said.

Additional reporting by Zoe Low and Elizabeth Cheung