South Korea Moves to Force Crypto and Stock Influencers to Reveal Holdings

The proposal, introduced by Democratic Party lawmaker Kim Seung-won, reflects growing concern that so-called “finfluencers” can move markets without transparency about their own positions. Lawmakers argue that undisclosed holdings and paid promotions create clear conflicts of interest, leaving retail investors vulnerable to misleading commentary and coordinated hype.

Under the draft amendments, individuals who regularly provide investment advice or receive compensation to promote financial products would be subject to strict reporting obligations. The changes would be implemented through revisions to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users.

Mandatory disclosures would include the type and size of assets held by the influencer, along with any payments or benefits linked to their recommendations. The rules would apply broadly across social media platforms, online channels, broadcasts, and other mass publications.

Prison Terms and Heavy Fines for Violations

The proposed penalties mirror those applied to serious capital market offenses such as price manipulation and front-running.

Failure to disclose stock holdings could result in up to one year in prison or a fine of up to 30 million won. Violations involving cryptocurrencies would carry even steeper consequences. Given the higher volatility and manipulation risks in digital asset markets, offenders could face more than one year in prison or fines equal to three to five times the amount of unfair gains or avoided losses.

The stricter treatment of crypto-related offenses highlights regulators’ concerns about rapid price swings fueled by online promotion.

Part of a Broader 2026 zRegulatory Push

The initiative forms part of South Korea’s wider strategy in 2026 to tighten supervision of digital assets and online financial commentary.

The Financial Supervisory Service (FSS) is rolling out AI-driven monitoring systems designed to detect suspicious trading patterns and coordinated misinformation campaigns on social media in real time. Authorities say these tools will help identify pump-and-dump schemes before retail investors suffer large losses.

The legislative push follows several high-profile market disruptions, including a major operational error at the Bithumb exchange earlier this year, which reignited debate over market stability and promotional practices in the crypto sector.

The new influencer rules would also build on earlier transparency measures introduced in 2024, when senior public officials and lawmakers were required to disclose their cryptocurrency holdings regardless of size.

Taken together, the reforms signal a clear shift toward stricter accountability in South Korea’s online investment landscape, particularly as digital assets continue to attract a growing base of retail participants.

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