South Korea targets finfluencers with strict asset disclosure law
South Korea plans finfluencer disclosure law to curb manipulation and protect investors.
Summary
- Bill amends Capital Markets and Virtual Asset User Protection Acts to cover stocks and crypto promotions.
- Influencers must disclose asset types, quantities, and any paid compensation tied to recommendations.
- Violations face penalties similar to unfair trading, including fines and criminal liability, alongside new AI-based market surveillance.
South Korea’s Democratic Party has introduced legislation requiring financial influencers to disclose personal asset holdings and compensation when recommending cryptocurrencies or stocks, according to reports from the country’s legislative assembly.
The proposal, led by lawmaker Kim Seung-won, includes amendments to the Capital Markets Act and the Virtual Asset User Protection Act. The draft framework would mandate that influencers disclose the type and quantity of assets held when promoting specific tokens or stocks through social media, livestreams, or broadcast channels, according to the legislative text.
Influencers would also be required to reveal any compensation received in exchange for recommendations. Violations would carry penalties similar to those applied in unfair trading practice cases, including fines and potential criminal liability, the proposal states.
The legislation aims to prevent undisclosed promotional activity that can lead to pump-and-dump schemes, where influencers promote assets before selling into price increases, according to the Democratic Party’s statement. The measures seek to reduce market manipulation risks and improve investor protection through mandatory transparency around holdings and financial incentives.
The proposal follows broader regulatory expansion in South Korea throughout 2026. The Financial Supervisory Service has deployed AI-based monitoring tools designed to detect abnormal trading patterns and market manipulation in real time, according to the agency.
Additional measures introduced this year include new reporting requirements for foreign property investors, who must now disclose cryptocurrency transaction histories in certain cases, regulatory filings show.
South Korea maintains one of the world’s most active retail cryptocurrency markets. The legislation, if passed, would represent one of the most direct regulatory actions globally targeting social media-driven financial promotion in the digital asset sector, according to regulatory analysts.
