South Korea’s Democratic Party is advancing new legislation that would require financial influencers, often referred to as “finfluencers”, to publicly disclose their personal asset holdings and any compensation received when recommending cryptocurrencies or stocks.
The proposal aims to reduce conflicts of interest and curb market manipulation in the country’s rapidly growing digital asset market.
What the Proposed Law Would Require
The initiative, led by lawmaker Kim Seung-won, includes amendments to both the Capital Markets Act and the Virtual Asset User Protection Act.
Under the draft framework, influencers would be required to disclose the type and quantity of assets they personally hold whenever they promote specific tokens or stocks through social media, livestreams, or other broadcast channels. They would also need to reveal whether they received any form of compensation in exchange for making those recommendations.
Violations could carry penalties similar to those applied in cases of unfair trading practices, including fines and potential criminal liability.
Targeting Pump-and-Dump Schemes
Lawmakers say the objective is to prevent undisclosed promotional activity that can lead to pump-and-dump schemes, where influencers promote assets they already own before selling into the price spike.
By mandating transparency around both holdings and financial incentives, regulators hope to reduce manipulation risks and improve investor protection.
Part of a Broader 2026 Crackdown
The proposal aligns with broader regulatory tightening in South Korea throughout 2026.
The Financial Supervisory Service (FSS) has been expanding AI-based monitoring tools designed to detect abnormal trading patterns and market manipulation in real time.
Additional measures introduced this year include new reporting requirements for foreign property investors, who must now disclose cryptocurrency transaction histories in certain cases.
Bigger Picture
South Korea has one of the world’s most active retail crypto markets, and policymakers appear determined to bring influencer-driven trading under formal oversight.
If passed, the legislation would mark one of the most direct regulatory moves globally targeting social media-driven financial promotion in the digital asset space.
