South Korean legislators have proposed strict new rules requiring financial influencers to disclose their cryptocurrency holdings and any payment for promotional content. The legislative changes aim to protect investors from hidden conflicts of interest and misleading advice, following similar regulatory pushes in the United Kingdom and United States. Violations would be classified as major capital market infractions.
South Korean authorities are planning stricter rules on cryptocurrency promotion through platforms used by influencers. Legislators require individuals to reveal their crypto assets and any financial advertisements they have received, reflecting disciplinary measures implemented in the United Kingdom and United States.
Lawmaker Kim Seung-won submitted legislative changes to the Capital Markets Act and the Virtual Asset User Protection Act. The goal is to protect investors from hidden conflicts of interest and misleading advice.
The law would require influencers making investment recommendations to reveal their complete asset holdings, including all types of crypto and financial products. The requirement also includes all payments received for asset promotion, with detailed reporting to be established through a future presidential decree.
Penalties for violations will create serious consequences for offenders. Violations will be categorized as major capital market violations, which include price manipulation and front-running activities.
The legislation demonstrates increasing public worry about crypto information dissemination through online channels. Kim Seung-won presented evidence that influencers had spread false information while engaging in self-interest activities, creating a trust deficit that damages inexperienced retail investors.
South Korea operates as part of a larger international initiative toward oversight. The UK Financial Conduct Authority has imposed limitations on financial advertisements, while the United States Securities and Exchange Commission has pursued high-profile cases involving undisclosed promotions.
The message across markets is that cryptocurrency’s promotional activities now face regulatory oversight. The new business standard requires companies to provide complete transparency to their customers.
