Hong Kong's government announced plans Monday to ensure all crowdfunding must seek official approval following a clampdown on democracy protesters using donations to pay for their legal defence.

Online crowdfunding was popular among the city's democracy supporters to pay legal and medical costs for those arrested during huge and often violent protests in 2019, and the living expenses of those who have fled abroad.

But most projects have closed down, or have been forcibly shuttered, as Beijing and local authorities tighten their grip.

The proposal unveiled Monday will prevent activities that are "fraudulent, jeopardising public interest, or endangering public and national security in the name of crowdfunding", a government spokesperson said.

All future crowdfunding activities, online or offline, must be approved first by a Crowdfunding Activities Office "regardless of their purpose or location".

"Illegal" crowdfunding projects will be halted by law enforcement and subject to prosecution, according to the proposal.

Officials are also considering a registration system for online crowdfunding platforms even if they are not based in Hong Kong, but they did not specify enforcement details.

The plans will undergo three months of public consultation before heading to a legislature that has been scrubbed of opposition since 2019's protests.

Secretary for Financial Services and the Treasury Christopher Hui wrote on Saturday that Hong Kong lacked a regulatory system for crowdfunding and projects must be "transparent and accountable".

The proposal makes exceptions and special accommodations for lottery sales, physical donation events, charity events and crowdfunding events "widely recognised by the society".

Last month, trustees and the secretary of the now-defunct "612 Humanitarian Relief Fund", which raised funds to support protesters, were fined by a court for failing to properly register their group.

The fund disbanded last year after national security police demanded it hand over operational details, including information about its donors and beneficiaries.

Among the fund's defendants was 90-year-old Cardinal Joseph Zen, one of Asia's most senior Catholic bishops.

Prosecutors have also used money laundering charges in cases involving crowdfunding for pro-democracy causes.

In October, a trio of Hong Kong activists said online payments firm Stripe declined their business after they used crowdfunding to pay legal bills accrued from suing police.

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