Background and Proposal Details
According to The Block, South Korean ruling party lawmaker Kim Seung-won has proposed amendments to the 'Capital Markets Act' and 'Virtual Asset User Protection Act' to increase oversight of influencers offering cryptocurrency investment advice on social media. The proposal requires influencers to disclose their crypto holdings and any compensation received for promotions.
Promoting Transparency and Combating Misconduct
This legislation aims to enhance market openness while curbing deceptive content and self-dealing. Under the proposed rules, individuals offering investment tips on social platforms, publications, or broadcasts must reveal the types and amounts of crypto they own, as well as any payments received for endorsements. Violators could face penalties similar to those for market manipulation.
Need for Regulation
Lawmaker Kim Seung-won emphasized that these measures are necessary to address conflicts of interest and investor harm caused by unchecked social media commentary, promoting a more accountable industry environment.