South Korea has established strict rules against all activities that promote cryptocurrency. The Democratic Party which holds power in South Korea has proposed legislation that would require social media financial influencers to disclose their complete ownership of assets and their payment details for sponsored content.
Lawmaker Kim Seung-won submitted legislative changes for both the Capital Markets Act and the Virtual Asset User Protection Act. The goal is simple: protect investors from hidden conflicts of interest and misleading advice.
The law would require influencers who make investment recommendations to reveal their complete asset holdings if it becomes law. The requirement includes all types of crypto and financial products which they possess.
The requirement also includes all payments which they received for asset promotion. The government will establish detailed reporting requirements through a future presidential decree.
The penalties which will result from violations create serious consequences for offenders. The legal system will categorize violations as major capital market violations which include price manipulation and front-running activities.
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The legislation demonstrates increasing public worry about crypto information dissemination through online channels. A single post from an influencer has the power to change market conditions. The damage occurs quickly when followers think that someone gives them unbiased information while actually using paid advice for personal benefit.
Kim Seung-won presented evidence that influencers had spread false information while engaging in self-interest activities. The activities create a trust deficit that damages retail investors who typically enter the crypto market without experience.
The government requires businesses to disclose their operations to restore public trust while decreasing market manipulation that results from excessive hype.
South Korea operates as part of a larger international initiative. The UK Financial Conduct Authority has imposed limitations on financial advertisements. The organization established new regulations in 2023 which prohibit deceptive marketing of high-risk cryptocurrency items.
The United States Securities and Exchange Commission employs the same enforcement method for its operations. Kim Kardashian and Shaquille O’Neal have both become high-profile cases because they failed to disclose their payment details when endorsing cryptocurrency assets.
The message across markets is clear. Cryptocurrency exists as a decentralized digital currency, yet its promotional activities now face regulatory oversight. The new business standard requires companies to provide complete transparency to their customers.
Also Read: South Korea Cracks Down on Crypto Manipulation with New FSS Enforcement Plan
