Hong Kong plans to regulate crowdfunding

Hong Kong, January 5 (ANI): Hong Kong’s government announced plans to regulate crowdfunding of democracy protesters who use donations to pay for their legal defence, reported Nikkei Asia.

Under proposed regulations, all crowdfunding must seek official approval before it starts putting halt to pro-democracy fundraising. The regulations recently released for public comment would mandate that individuals and organizations submit plans to a new department for review before soliciting donations, to ensure no funds go toward activities that could pose national security risks, reported Nikkei Asia.

Pro-democracy activists have relied heavily on crowdfunding and other public appeals for cash, including for the mass protests of 2019. The government has cracked down on major fundraising avenues for activists through allegations of money laundering and failing to register funds, with Cardinal Joseph Zen, the former head of the Catholic Church in Hong Kong, and others recently found guilty of the latter charge. Hong Kong authorities are pushing for a more comprehensive regulatory approach to crowdfunding, citing security risks in the growing space.

The new rules aim to block such campaigns from getting off the ground in the first place, rather than pursue them after the fact, reported Nikkei Asia. The regulations would be another blow to Hong Kong’s already beleaguered pro-democracy movement. Several private-sector organizations that monitor human rights issues or provide support for prisoners have been forced to stop operating here since a sweeping security law was enacted in 2020, and prominent activists have been jailed.

“It seems intended to cut off funding for pro-democracy activities,” said Toru Kurata, a professor at Rikkyo University in Tokyo and an expert in Hong Kong affairs. “It strengthens the grip on civil society.” Lawmaker Gary Chan Hak-kan argued in a pro-Beijing newspaper that Hong Kong must “guard closely against anti-China elements using crowdfunding for activities that put out national security at risk,” reported Nikkei Asia.

It has been proposed that religious activity and online media be exempted from the crowdfunding regulations, but they could also be caught up in the crackdown depending on how it is implemented. The Democratic Party has argued that the proposed regulations risk harming Hong Kong’s position as an international financial center and unnecessarily restricting entrepreneurs.

The party is in dire financial straits as major fundraising activities such as demonstrations and galas have been restricted. Another pro-democratic political party, the Civic Party, said in December it would disband after receiving no nominations for its executive committee, reported Nikkei Asia.