MR CHAN KIN-POR (in Cantonese): While the Secretary has stated clearly in his main reply that crowdfunding activities involving equity or lending are subject to regulation, many crowdfunding activities nowadays are of unknown purposes. Although crowdfunding accounts are monitored by banks, it will be too late for banks to cancel such accounts when they are proved to be involved in money laundering or savings of unknown origin as funds have already been raised.
May I ask the Government: What financial measures will be taken to avoid crowdfunding activities getting into the grey areas? The authorities should not wait till the money is absconded before freezing the bank accounts. Are there any corresponding measures?
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): I thank Mr CHAN for his supplementary question. We may all know that a person has to open a bank account before engaging in any transactions through a financial institution. In the process of account opening, the bank is required go through the “Know Your Customer (KYC)” procedures to learn about the background of the account holder. In case the situation described by Mr CHAN subsequently happens as the account holder has violated the laws in any financing or crowdfunding activities, the authorities will impose statutory sanctions as appropriate, depending on which of the three aforesaid ordinances (including SFO, C(WUMP)O and MLO) applies.