TLDR
- South Korean legislators are preparing regulations mandating transparency from cryptocurrency and stock market influencers regarding their portfolios and financial relationships.
- The legislation would modify the Capital Market and Financial Investment Business Act alongside the Virtual Asset Users Protection Act.
- Content creators who consistently offer investment guidance or accept compensation must disclose the nature and volume of their asset positions.
- Coverage extends to digital content, printed materials, and broadcast media, with implementation details to follow through presidential decree.
- Enforcement measures may mirror penalties currently applied to insider trading and market manipulation offenses.
South Korean authorities are advancing regulatory frameworks designed to enforce transparency among social media personalities discussing investments. Legislative efforts focus on amending current virtual asset laws and capital market regulations. The initiative addresses compensated promotional activities and ongoing investment recommendations directed at public audiences.
Legislative push addresses investment content transparency
Democratic Party representative Kim Seung-won leads the effort to update the Capital Market and Financial Investment Business Act. His work extends to modifying the Act on the Protection of Virtual Asset Users.
Under the proposed framework, content creators would need to disclose financial arrangements and personal holdings when discussing investment opportunities. Requirements would apply to individuals who regularly share guidance or receive monetary benefits. The scope encompasses printed publications, digital platforms, and broadcast media. Specific implementation guidelines would emerge through subsequent presidential decrees.
Kim said certain online figures share investment perspectives without transparent disclosure of their financial relationships. He noted, “These individuals are providing inappropriate information and creating conflicts of interest.” He emphasized that their reach can result in unpredictable financial harm to followers.
Proposed enforcement mirrors existing market violation penalties
The legislative draft establishes penalties comparable to those governing insider trading and market manipulation offenses. Regulatory bodies would classify violations as significant infractions under financial legislation.
Herald Business highlighted that Kim holds a position on the National Assembly’s Political Affairs Committee. His objective centers on minimizing conflicts of interest within digital investment content. He observed that financial influencers frequently counsel broad audiences while wielding considerable public sway.
Data from the Financial Supervisory Service reveals substantial growth in reports concerning quasi-investment advisory operations. Reported instances climbed from 132 in 2018 to 1,724 throughout 2024. Regulators attribute this surge to the proliferation of financial content across digital platforms.
Quasi-investment advisory services deliver generalized guidance through various media outlets. While these entities avoid direct asset management, they shape decisions among retail investors. Regulatory agencies have emphasized concerns regarding transparency and responsibility.
The proposed regulations would encompass both conventional financial instruments and virtual assets. Content creators would need to reveal the categories and amounts of assets they hold. Additional requirements include reporting any financial benefits connected to promotional activities.
Legislators plan to establish clear criteria for when consistent unpaid guidance triggers disclosure obligations. The presidential decree would establish frequency benchmarks and compensation thresholds. Implementation specifics would become available following legislative assessment.
Other regulatory bodies worldwide have implemented comparable frameworks. The United Kingdom’s Financial Conduct Authority mandates advance approval for financial promotional content.
Within the United States, the Securities and Exchange Commission has imposed fines on parties for undisclosed promotional arrangements. The Financial Industry Regulatory Authority has similarly issued sanctions related to digital investment marketing activities.
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