- Finfluencers in South Korea face strict new disclosure rules
- Lawmakers push transparency on crypto holdings and paid promotions
- Violations may trigger penalties matching capital market offenses
South Korea’s governing party has taken direct aim at cryptocurrency promotion on social media. Lawmakers now want financial influencers to publicly reveal what they own and how they get paid. The proposal signals a tougher stance on online investment commentary that shapes retail trading decisions.
Kim Seung-won, a lawmaker from the Democratic Party and member of the National Policy Committee, introduced amendments to the Capital Markets Act and the Virtual Asset User Protection Act. According to local outlet Herald Business, the proposal focuses on individuals who regularly share investment advice through social platforms, publications, or broadcasts.
Under the bill, so-called finfluencers must disclose any compensation tied to crypto promotions. Additionally, they would need to report the types and quantities of digital assets and financial products they personally hold. Authorities plan to outline specific disclosure standards through a presidential decree.
Lawmakers argue that clearer rules will help investors assess potential conflicts of interest. Moreover, the proposal seeks to limit situations where influencers promote tokens they already own without transparency. Kim cited rising concerns over misleading information and self-dealing practices in online investment circles.
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Lawmakers Target Conflicts of Interest in Crypto Promotions
The proposed amendments would align penalties with existing capital market offenses. Violations could face consequences similar to price manipulation or front-running cases. Consequently, influencers who fail to disclose required information may encounter significant legal and financial penalties.
Regulators believe that undisclosed holdings create incentives to inflate prices for personal gain. Besides, rapid information sharing on social platforms often amplifies speculative behavior. Lawmakers contend that stronger disclosure standards could reduce sudden retail losses driven by viral promotions.
South Korea’s initiative mirrors broader international regulatory efforts. In the United Kingdom, the Financial Conduct Authority restricts financial promotions to approved entities. Furthermore, the regulator introduced specific crypto promotion rules in 2023 to curb misleading advertising.
In the United States, the Securities and Exchange Commission has penalized several public figures for undisclosed crypto endorsements. High-profile cases involved Kim Kardashian and former NBA star Shaquille O’Neal. Those actions underscored regulators’ focus on transparency in digital asset marketing.
South Korean officials now aim to apply similar principles within their domestic market. Significantly, the country maintains one of the world’s most active retail crypto sectors. Policymakers therefore view influencer oversight as essential to investor protection.
Conclusion
The proposed amendments place transparency at the center of South Korea’s crypto oversight strategy. If enacted, influencers would face stricter disclosure duties and meaningful penalties for violations. The move reflects growing global efforts to regulate digital asset promotion and protect retail investors.
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