South Korea plans to increase oversight of online investment promotions. New legislative proposals would require cryptocurrency and stock influencers to publicly share their financial interests and any paid partnerships.
Local outlet Herald Business reports that Kim Seung-won, a member of the National Assembly’s Political Affairs Committee, is drafting changes to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users.
If passed, the changes would require individuals who repeatedly offer investment advice or receive compensation to promote financial products or virtual assets to reveal both the payments received and the type and quantity of assets they personally hold.
These disclosure rules would cover publications, livestreams, online posts, and broadcast appearances. Details about thresholds and enforcement will be set later by a presidential decree.
Lawmaker flags rising investor risks
The proposal aims to curb conflicts of interest and reduce retail investor harm linked to so-called “finfluencers.”
Kim warned that people with large online followings are sharing investment opinions without enough accountability. Sometimes, hidden financial incentives or personal holdings can affect their advice, putting regular investors at risk of sudden losses.
Regulatory data underscores the concern. Reports involving quasi-investment advisory businesses, entities that provide general market advice through media channels, surged from 132 cases in 2018 to 1,724 in 2024, reflecting rapid growth in loosely regulated online advisory activity.
Breaking these new rules could lead to penalties similar to those for market manipulation or insider trading, showing that enforcement will be strict.
Global watchdogs also crack down
South Korea’s move mirrors broader international efforts to rein in influencer-driven financial promotions.
In the UK, the Financial Conduct Authority now requires financial promotions to get approval first. South Korea has also updated its crypto licensing rules, making it harder for companies to operate and giving regulators more power to check ownership, governance, and risk controls in the digital asset sector.
Italy’s Commissione Nazionale per le Societa e la Borsa recently revealed guidance from the European Securities and Markets Authority, stressing that EU advertising and investment laws fully apply to social media personalities promoting crypto and other high-risk assets.
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