3 ways of how crowdfunding can be anti- social

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Crowdfunding has picked up the interest of many small and large groups to help them raise funds at a faster rate as compared to the traditional mode of financing. This new model has many merits to brag about for it has only made ‘cause’ achievement easier than before. The cause can be a business or a non- business activity of either public or personal interest. Be it small amounts in hundreds of dollars or the big ones in millions, crowdfunding has made it easier for all. However, in the process of its increasing popularity, we just cannot overlook the possibilities of misusing the funds raised through this mode. There are many possibilities of the same for the model has no structure and formal legal framework in most of the economies. This underpins the fact of higher probability to use the funds in unethical ways.

Here are some of the ways that shows the illicit use of crowdfunding model for funding ‘unethical causes’:

  • Laundering: Money laundering has always been a worrisome topic in most of the economies for it leads to unaccountable and untraceable transfers of illegitimate monies. Crowdfunding can become such transfer mode by furbishing a superficial cause at the frontend while actually transferring the money to different accounts. Such money is not reported in the books generally. Moreover, given the less strict nature of this mode of investment, it becomes easier for the big players or money launderers to do so more conveniently. This impacts the economy and the currency valuations along with the inflation rate by and large.
  • Terrorism: There are groups that have wrong propositions, yet supporters for the same spread all over the world. Crowdfunding, being online, helps them with the access to all such supporters in a convenient way. Besides, funding is one thing that such groups with terrorism activists require the most. This mode is an easy way to fulfil their terrorist cause despite it does not favour the society.
  • Anti- Social Activities: Many people plan different anti- social activities like thefts, robberies, etc. at a large scale. These anti- social activities are typically hi- tech ones. Their planning and execution require huge amounts of money, which may not be available with those people. Crowdfunding can be used by them through counterfeit. People get attracted to the fake proposition in the campaign and readily invest in the same. However, the money is used for some wrong purpose.

So, while crowdfunding is intended to help people achieve their business plans and other non- business objectives that are only ethical from all perspectives, there exist bands that can use it for unethical purposes as well. As the model has no appropriate legal framework or strict onlookers, it becomes difficult to track the actual use of the money raised in the form of crowd funds. It does not favour the growth in the society and is a threat to the society in the long run.

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This article is written by the Crowdfunders Editorial Team. In Asia, Crowdfunders.Asia is a leading portal on providing news related to crowdfunding, start-up, property and business. It is operated by CoAssets.com. CoAssets is South East Asia’s first listed and largest real estate crowdfunding platform. If you have any Crowdfunding news or stories to share, please email [email protected]

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