South Korea Proposes Landmark Law Forcing Influencers to Reveal Crypto Holdings

SEOUL, South Korea – March 2025 – South Korea’s ruling party has introduced a groundbreaking legislative proposal that could fundamentally reshape the cryptocurrency information landscape. The new bill specifically targets social media financial influencers, commonly called finfluencers, requiring them to disclose personal cryptocurrency holdings and promotional compensation. This development represents a significant escalation in regulatory efforts to protect investors from potentially misleading financial advice in the rapidly evolving digital asset space.

South Korea’s Crypto Disclosure Law Targets Financial Influencers

The proposed legislation emerges from South Korea’s Financial Services Commission and the ruling People Power Party. Lawmakers specifically designed the bill to address growing concerns about undisclosed conflicts of interest within the cryptocurrency promotion ecosystem. Furthermore, the legislation would establish clear legal requirements for influencers who discuss digital assets with their substantial online followings. The National Assembly will review the proposal during its current session, potentially creating Asia’s most comprehensive influencer disclosure framework.

South Korean authorities have monitored the finfluencer phenomenon closely since 2023. They observed a dramatic increase in cryptocurrency-related content across platforms like YouTube, Instagram, and domestic services such as Naver Blog. Consequently, regulators identified a pressing need for standardized transparency measures. The proposed law follows similar initiatives in the United Kingdom and Australia, yet it establishes more stringent requirements specifically tailored to cryptocurrency markets.

Understanding the Finfluencer Regulatory Framework

The legislation introduces several key requirements for financial influencers operating within South Korea’s jurisdiction. First, influencers must disclose their personal cryptocurrency holdings when discussing specific digital assets. Second, they must reveal any compensation received for promoting cryptocurrencies or related services. Third, the law mandates clear risk warnings about cryptocurrency investments. Finally, influencers must maintain accurate records of their disclosures for regulatory review.

South Korea’s Financial Supervisory Service would enforce these requirements through several mechanisms. The agency could impose substantial fines for non-compliance, potentially reaching millions of won. Additionally, regulators might require platforms to remove content that violates disclosure rules. The legislation also establishes clearer definitions of what constitutes financial influencer activity, removing ambiguity from previous guidelines.

Comparative Analysis of Global Influencer Regulations

Impact on South Korea’s Cryptocurrency Ecosystem

The proposed legislation will likely create immediate effects across South Korea’s digital asset industry. Major cryptocurrency exchanges operating in the country, including Upbit and Bithumb, have already begun reviewing their influencer partnership programs. These platforms recognize that transparent marketing practices will become essential for regulatory compliance. Additionally, the law may accelerate the professionalization of cryptocurrency content creation, favoring established financial educators over casual promoters.

Market analysts predict several secondary effects from the regulatory change. First, influencer marketing costs may increase as compliance requirements add administrative overhead. Second, cryptocurrency projects might shift promotional resources toward more traditional marketing channels. Third, investor confidence could improve as transparency reduces information asymmetry. Finally, the legislation might establish South Korea as a regulatory model for other Asian markets considering similar measures.

Expert Perspectives on Regulatory Development

Financial regulation specialists have offered nuanced assessments of South Korea’s proposed legislation. Professor Kim Min-ji from Seoul National University’s Law School notes, “This legislation represents a logical extension of existing financial disclosure principles to digital assets. Regulators correctly recognize that influencer marketing creates similar investor protection concerns as traditional financial promotions.” Her analysis emphasizes the continuity between conventional finance regulation and emerging cryptocurrency rules.

Industry representatives have expressed more cautious viewpoints. The Korea Fintech Industry Association has requested clarification on several implementation details. Specifically, the association seeks guidance on disclosure frequency requirements and the threshold for what constitutes promotional content. These practical considerations will significantly influence how smoothly the industry adapts to the new regulatory environment.

Historical Context of South Korean Crypto Regulation

South Korea’s latest proposal continues the country’s evolving approach to cryptocurrency governance. In 2017, authorities implemented real-name verification requirements for exchange accounts. Subsequently, 2021 brought the Specific Financial Information Act, establishing comprehensive anti-money laundering frameworks. The current legislation represents the next logical phase, addressing information transparency rather than transactional security.

Several factors have driven this regulatory progression. First, South Korea maintains one of the world’s highest cryptocurrency adoption rates among developed economies. Second, the country experienced significant cryptocurrency-related fraud cases in recent years. Third, regulators have observed the maturation of influencer marketing as a primary information channel for retail investors. These developments collectively created the conditions for more sophisticated regulatory interventions.

Implementation Timeline and Compliance Requirements

The legislative process follows a structured timeline with several key milestones. First, the National Assembly’s Science, ICT, Broadcasting and Communications Committee will review the proposal. Next, the legislation proceeds to a plenary session for debate and potential amendments. Finally, if passed, the law would typically take effect after a six-month grace period, allowing influencers and platforms to adjust their practices.

During this implementation period, several compliance preparations will become necessary. Influencers must establish systems for tracking their cryptocurrency holdings and promotional arrangements. Platforms need to develop technical solutions for disclosure presentation and verification. Regulators will create detailed guidelines addressing edge cases and interpretation questions. These coordinated preparations aim to ensure smooth regulatory transition without disrupting legitimate information sharing.

Conclusion

South Korea’s proposed cryptocurrency disclosure legislation represents a significant advancement in digital asset regulation. The law specifically addresses financial influencers who have become important information sources for retail investors. By mandating transparency about holdings and compensation, regulators aim to reduce conflicts of interest and improve market integrity. This development continues South Korea’s pattern of proactive cryptocurrency governance while potentially establishing a model for other jurisdictions. The legislation’s ultimate impact will depend on careful implementation that balances investor protection with continued innovation in cryptocurrency information dissemination.

FAQs

Q1: What exactly does South Korea’s proposed law require from cryptocurrency influencers?
The legislation mandates that financial influencers disclose their personal cryptocurrency holdings when discussing specific digital assets. Additionally, they must reveal any compensation received for promoting cryptocurrencies or related services. The law also requires clear risk warnings about cryptocurrency investments.

Q2: Which influencers would be affected by this new regulation?
The law targets social media financial influencers, commonly called finfluencers, who discuss cryptocurrency investments with their followers. The specific criteria likely include audience size, engagement metrics, and the frequency of financial content. Both domestic and international influencers reaching South Korean audiences may need to comply.

Q3: How does South Korea’s approach compare to other countries’ influencer regulations?
South Korea’s proposal appears more comprehensive than existing frameworks in other jurisdictions. While countries like the UK and Australia have general financial promotion rules, South Korea’s legislation specifically addresses cryptocurrency disclosures with detailed requirements and substantial penalties for non-compliance.

Q4: What penalties might influencers face for violating the disclosure requirements?
Regulators could impose substantial fines for non-compliance, potentially reaching millions of won. Additionally, authorities might require platforms to remove content that violates disclosure rules. Repeated violations could lead to more severe enforcement actions, though the legislation details specific penalty structures.

Q5: When would this law potentially take effect if passed?
If approved by the National Assembly, the law would typically include a six-month grace period before taking full effect. This implementation period allows influencers, platforms, and regulators to prepare for the new requirements. The exact timeline depends on legislative progress and potential amendments during review.