- South Korea’s mandatory asset disclosure for crypto influencers seeks to promote digital financial products.
- Violation could lead to penalties similar to those of capital market offenses, like manipulation and insider trading.
- Lawmakers have cited the main cause for alarm to be the rising investor harm linked to undisclosed holdings and promotions.
South Korea’s new law requires crypto influencers to openly disclose their holdings in the asset. This is because the ruling Democratic Party seeks to enact transparency rules for individuals promoting cryptocurrency investment products.
Proposed Amendments Target influencers
According to a report, South Korea’s crypto influencer asset disclosure requirements were introduced by Kim Seung-won of the Democratic Party. He is preparing amendments to the Capital Markets Act and the Virtual Asset User Protection Act.
The proposal would require influencers to disclose compensation received for promoting financial investment products. It also mandates disclosure of the types and quantities of crypto assets and financial products they hold.
The bill applies to individuals who repeatedly provide investment advice to unspecified audiences. This includes advice shared through social media platforms, publications, communications, and broadcasts.
Specific thresholds will be defined through a presidential decree. Kim stated that some influencers offer investment guidance without oversight while holding strong public influence.
He said undisclosed conflicts of interest have contributed to investor losses. Posts circulating on local social media platforms referenced the proposal shortly after local media reports emerged.
Lawmakers confirmed that the formal submission of the amendments is being finalized. Penalties for violations would match sanctions applied to unfair capital market practices.
Rising Oversight Amid Growing Social Media Influence
South Korea‘s crypto influencer asset disclosure efforts follow a rise in reported misconduct cases. Regulators attribute part of this growth to unlicensed online advisory activities.
Officials have noted that some influencers disseminate inaccurate information or exaggerated claims. Others allegedly promote assets while holding undisclosed positions. Such actions have drawn regulatory scrutiny.
Kim said that financial influencers often operate without formal registration. Lawmakers argue that transparency measures are necessary.
Industry researchers have also commented publicly. A senior researcher at the Capital Market Research Institute stated that online-centered sales channels increased the detection of illegal practices.
She added that unregistered advisors continue using social media for misleading promotions. Monitoring mechanisms remain under review as digital engagement expands.
Global Context of Influencer Regulation
South Korea crypto influencer asset disclosure aligns with regulatory steps taken in other jurisdictions. The UK’s Financial Conduct Authority restricts financial promotions without prior authorization.
In 2023, the FCA introduced updated crypto financial promotion rules. These rules prohibit misleading advertisements related to high-risk digital assets.
Notable cases included reality television personality Kim Kardashian. The SEC also charged former basketball player Shaquille O’Neal in separate crypto promotion matters.
These international developments were referenced in local coverage of the Korean proposal. Policymakers noted that oversight of financial influencers is expanding globally.