South Korea is reportedly preparing new rules that would force social-media personalities promoting cryptocurrencies and stocks to reveal what they own and whether they are being paid.
Democratic Party lawmaker Kim Seung-won, a member of the National Assembly’s Political Affairs Committee, is drafting amendments to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users, according to a report from Korean-language business news website Herald Business.
Under the proposal, individuals who repeatedly offer advice or receive compensation to encourage the public to buy or sell financial products or virtual assets must disclose the compensation received and the type and quantity of assets they hold. The requirement would apply to advice delivered through publications, online communications and broadcasts, with detailed criteria to be set by presidential decree.
Violations may carry penalties similar in severity to those for market manipulation or insider trading, per the report.
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Lawmaker warns on “finfluencer” investor risks
The initiative is aimed at reducing conflicts of interest and improving transparency in online investment promotion. “So-called fin-influencers are emerging, offering investment advice to unspecified individuals without compensation from positions of significant public influence,” Kim reportedly said.
“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,” he added.
The move comes as Financial Supervisory Service data shows reports involving quasi-investment advisors (QIAB), entities in Korea that provide general investment advice to people via media, jumped from 132 in 2018 to 1,724 in 2024, according to the report.
Cointelegraph reached out to Kim Seung-won for comment, but had not received a response by publication.
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Global regulators tighten rules on finfluencers
Regulators abroad have also taken similar initiatives. The United Kingdom’s Financial Conduct Authority allows financial promotions only with prior approval, while the US Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have issued fines and reprimands tied to undisclosed promotions.
Last month, Italy’s market watchdog Commissione Nazionale per le Societa e la Borsa (CONSOB) also circulated new guidance from the European Securities and Markets Authority (ESMA) warning that EU investment and advertising rules fully apply to social-media “finfluencers,” including those promoting crypto and high-risk products.
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