In South Korea Groundbreaking New Regulations in the Cryptocurrency Sector Are on the Way

The South Korea is also preparing new rules for financial influencers who give stock and cryptocurrency tips on social media. The Democratic Party of Korea’s Kim Seon-won, a member of the National Assembly, is working on drafting he said would amend both the Capital Markets Law and the Virtual Asset User Protection Law.

The proposed rule seeks to require mandatory disclosure obligations on “financial influencers” who recommend stock or cryptocurrency transactions on social media and similar platforms. In the draft, those who regularly give investment advice to an unspecified number of people or who earn money from this activity will have to publicly disclose fees they receive and the types and amounts of their holdings in relevant financial products and crypto assets. One of the Presidential decrees will explain the scope and technical details of implementation.

As a consequence of the new regulation, those who do not comply with the obligations may face sanctions similar to ones that are applied for unfair trading practices in capital market. They also have sanctions like the ones imposed on them for violations such as market manipulation and front-running. In the bill, it is characterized by its primary objective “Increasing transparency in investment information, less conflicts of interest and more prevent investor losses due to information asymmetry” (the main purpose of the law).

Official data shows the total count of “investment advisory services” applications for South Korea’s 132-year-old application to 1,724 in 2024 rose from 133–138 in 2018. It is more than a dozenfold increase in six years, which suggests the rapidly expanding influence of social media on financial markets. But critics are also pointing to the fact that some people outside the formal economy are making money by misleading statements, false advertising and even market manipulation.

Internationally, similar steps are being taken to take the same approach as . Regulatory bodies like the Financial Conduct Authority in the UK and the SEC in US have increased oversight and compliance for social media accounts that generate financial content in recent years.

*This is not investment advice.

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