BlockBeats News, February 25th. According to South Korean media reports, South Korean Democratic Party member Kim Seung-won is preparing to amend the Capital Market Act and the Virtual Asset User Protection Act, planning to impose a financial asset disclosure obligation on “Finfluencers” who recommend stocks and virtual assets on social media platforms.
According to the draft, individuals who repeatedly provide investment advice or recommend financial investment products or virtual asset trading to the general public for the purpose of receiving compensation must disclose the compensation they receive, as well as the types and quantities of relevant financial products and virtual assets they hold. The specific scope of application will be further detailed by presidential decree.
Violators are expected to face penalty standards equivalent to those for market manipulation and insider trading, which are considered unfair trading practices in the capital market. The legislative purpose is to enhance investment information transparency and prevent investor losses caused by information asymmetry and conflicts of interest.
It is reported that with the increasing influence of social media platforms, the number of “investment advisory-like businesses” in South Korea has increased from 132 cases in 2018 to 1724 cases in 2024, a growth of over 12 times in six years. Regulatory authorities believe that the number of unregistered practitioners engaging in false advertising, misleading statements, and even market manipulation for profit has been on the rise.
On the international front, regulatory bodies such as the UK Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC) have also strengthened compliance supervision of financial influencers in recent years.
