South Korea to force crypto and stock influencers to disclose holdings and paid promotions
South Korea is preparing legislation to require social-media influencers who repeatedly promote cryptocurrencies and stocks to disclose their asset holdings and any paid promotions. Democratic Party lawmaker Kim Seung-won is drafting amendments to the Capital Markets and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users. The proposal would cover repeated advice or compensated promotions delivered via publications, online posts and broadcasts, and require influencers to declare the type and amount of assets they hold and any remuneration received; enforcement details would be set by presidential decree. Violations could carry penalties comparable to those for market manipulation or insider trading. Regulators say the move responds to a surge in complaints about quasi-investment advisers — reports climbed from 132 in 2018 to 1,724 in 2024. The proposal follows global precedents: the UK’s FCA restricts financial promotions, the US SEC and FINRA have fined undisclosed promotions, and ESMA (backed by Italy’s CONSOB) has warned that “finfluencers” must follow investment and advertising rules. For crypto traders, this should increase transparency around influencer-driven price moves, reduce undisclosed paid-promotion risks (short-term pump-and-dump), and raise compliance scrutiny on social-media-driven liquidity events. Primary keywords: South Korea, crypto influencers disclosure, paid promotions, market manipulation, virtual asset law.
Neutral
Short-term: Neutral to mildly bearish on assets heavily driven by influencer hype. Mandatory disclosure and tougher penalties should reduce opaque paid-promotion activity and lower the frequency of rapid, influencer-driven pump-and-dump events, removing a driver of short-term volatility for affected tokens. That reduces sudden liquidity spikes that some traders exploit, which can be bearish for speculative pumps but bullish for market confidence.
Long-term: Neutral to slightly positive. Greater transparency and deterrence of undisclosed promotions improve market integrity and investor protection, which can attract more institutional participation and stable liquidity over time. Enforcement details and scope (who qualifies as an influencer, thresholds, cross-border reach) will determine the ultimate effect; strict, well-enforced rules favor reduced manipulation and healthier price discovery, while vague or heavy-handed rules could chill legitimate market commentary and reduce retail engagement. Overall, the direct price impact on major cryptocurrencies is likely limited; the policy mainly targets promotional channels rather than the assets themselves, hence a neutral classification.