South Korea's Democratic Party has introduced legislation requiring financial influencers to disclose personal asset holdings and compensation when recommending cryptocurrencies or stocks, according to reports from the country's legislative assembly. The proposal, led by lawmaker Kim Seung-won, amends the Capital Markets Act and the Virtual Asset User Protection Act.
Mandatory disclosure of asset types and compensation
Under the draft framework, influencers must disclose the type and quantity of assets they hold when promoting specific tokens or stocks via social media, livestreams, or broadcast channels. They must also reveal any compensation received in exchange for recommendations. The bill aims to prevent undisclosed promotional activity that can lead to pump-and-dump schemes, where influencers promote assets before selling into price increases.
Penalties mirror unfair trading rules
Violations would carry penalties similar to those applied in unfair trading practice cases, including fines and potential criminal liability, the proposal states. The Democratic Party's statement emphasizes that mandatory transparency around holdings and financial incentives reduces market manipulation risks and improves investor protection.
AI surveillance and foreign investor rules
The legislation follows broader regulatory expansion in South Korea throughout 2026. The Financial Supervisory Service has deployed AI-based monitoring tools to detect abnormal trading patterns and market manipulation in real time. Additional measures this year include new reporting requirements for foreign property investors, who must now disclose cryptocurrency transaction histories in certain cases. South Korea maintains one of the world's most active retail cryptocurrency markets. If passed, the legislation would represent one of the most direct regulatory actions globally targeting social media-driven financial promotion in digital assets, according to regulatory analysts.