South Korea is preparing legislation that would require social media influencers promoting cryptocurrencies and stocks to disclose their holdings and any compensation received for endorsements.
Democratic Party lawmaker Kim Seung-won is drafting amendments to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users to tighten transparency rules, according to local reports.
“So-called fin-influencers are emerging, offering investment advice to unspecified individuals without compensation from positions of significant public influence,”
Kim said.
Under the proposal, individuals who repeatedly provide investment advice or receive payment to promote financial products or virtual assets would be required to disclose the type and quantity of assets they hold as well as any compensation, with detailed standards to be set by presidential decree.
“These individuals are providing inappropriate information and creating conflicts of interest. However, their opinions have significant influence on the public, causing unpredictable losses to investors,”
Kim added.
Violations could attract penalties similar in severity to market manipulation or insider trading offences, as authorities respond to Financial Supervisory Service data showing reports involving quasi-investment advisers rose from 132 in 2018 to 1,724 in 2024.
The initiative aligns South Korea with regulators in the United Kingdom, United States and Italy that have tightened oversight of financial promotions by online “finfluencers,” extending existing securities and advertising rules to crypto-related content.