South Korea Plans Disclosure Rules for Crypto Influencers

TLDR

• South Korea is drafting new laws that would require crypto and stock influencers to disclose their holdings and compensation.
• The proposal would amend the Capital Market and Financial Investment Business Act and the Virtual Asset Users Protection Act.
• Influencers who repeatedly provide investment advice or receive payment would need to reveal the type and quantity of assets they own.
• The rules would apply to online posts, publications, and broadcast content, with detailed standards set by presidential decree.
• Violations could carry penalties similar to those imposed for insider trading or market manipulation.

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South Korea plans new rules that would require social media influencers to disclose crypto and stock holdings. Lawmakers are drafting amendments to existing capital markets and virtual asset laws. The proposal targets paid promotions and repeated investment advice delivered to the public.

South Korea targets online investment promotion practices

Democratic Party lawmaker Kim Seung-won is preparing amendments to the Capital Market and Financial Investment Business Act. He is also revising the Act on the Protection of Virtual Asset Users.

The proposal would require influencers to reveal compensation and asset holdings when promoting investments. The rule would apply to those who repeatedly provide advice or receive payment. It would cover publications, online posts, and broadcast content. Presidential decrees would later define detailed standards.

Kim said some online personalities provide advice without clear compensation disclosure. He stated, “These individuals are providing inappropriate information and creating conflicts of interest.” He added that their influence can cause unpredictable losses for investors.

Disclosure rules may carry penalties similar to market crimes

The draft would impose penalties similar to those for insider trading or market manipulation. Authorities would treat violations as serious breaches under financial law.

Herald Business reported that Kim serves on the National Assembly’s Political Affairs Committee. He aims to reduce conflicts of interest in online investment promotion. He said fin-influencers often advise unspecified individuals while holding strong public influence.

Financial Supervisory Service data shows a sharp rise in reports involving quasi-investment advisory businesses. Reports increased from 132 cases in 2018 to 1,724 cases in 2024. Authorities link this growth to expanding online financial content.

Quasi-investment advisory businesses provide general advice through media channels. They do not manage assets directly but influence retail investors. Regulators have raised concerns about transparency and accountability.

The proposal would apply to both traditional financial products and virtual assets. Influencers would need to disclose the type and quantity of assets they own. They would also need to report any compensation tied to promotions.

Lawmakers intend to clarify whether repeated unpaid advice triggers disclosure duties. The presidential decree would define frequency and compensation thresholds. Authorities would publish enforcement details after legislative review.

Regulators in other jurisdictions have adopted similar measures. The United Kingdom’s Financial Conduct Authority requires prior approval for financial promotions.

In the United States, the Securities and Exchange Commission has fined individuals for undisclosed promotions. The Financial Industry Regulatory Authority has also issued reprimands linked to online investment marketing.

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