Legislator Huang Shanshan’s Version of the Encryption Bill Includes KOL Regulation: Virtual Asset Advertising Chaos Set to Be Governed by Law
In the context of the increasingly heated virtual asset market, influencers and KOLs promoting tokens, platforms, and DeFi projects have become commonplace. To curb the hidden risks of misinformation and fraud, Huang Shanshan, a legislator from the People’s Party, has recently proposed the “Virtual Asset Service Act Draft,” which for the first time explicitly includes definitions and regulatory concepts for “Key Opinion Leaders (KOLs),” expected to significantly impact the marketing ecosystem for virtual assets across Taiwan.
(Legislator Huang Shanshan’s Public Hearing on Cryptocurrency Special Law | The Financial Supervisory Commission responds to the public, reserving space for crypto derivatives and having the means to regulate influencers)
“Key Opinion Leaders” KOLs officially included in the law – to become subjects of supervision
According to Article 3 of Huang Shanshan’s draft, “Key Opinion Leaders” are defined as individuals who regularly share information online for public viewing and profit from their social influence. This means that YouTubers, live streamers, bloggers, Twitter (X) KOLs, Threads creators, and others who earn profits through the promotion of virtual assets could potentially fall under the supervision of the Financial Supervisory Commission in the future.
This move responds to the growing prevalence of marketing chaos in the current market, such as “celebrity endorsement fraud” and “exaggerated profit guarantees,” especially as many KOLs are not licensed financial operators yet recommend virtual assets, which can easily mislead ordinary investors.
All advertising formats across multiple platforms will be restricted, including live streaming, short videos, and posts
Huang Shanshan’s draft further specifies the media and platforms covered by KOL marketing, which include Facebook, Instagram, YouTube, Discord, 17 Live, and even emerging communities like Threads. The forms of application are not limited to videos and posts but also include live programs and social interactions.
This action effectively draws a red line for the industry: as long as KOLs are involved in promotional activities related to virtual asset businesses, even if they are not platform operators or project issuing teams, they should be bound by legal regulations and responsibilities.
Expected Impact: Enhanced Investor Protection, KOLs Must Disclose Advertising Collaborations
Although the draft does not yet specify detailed penalties, future authorities may establish subordinate laws based on authorization to set requirements for KOLs, including:
– Disclosure obligations: must indicate whether it is a paid promotion.
– Prohibition of false information or exaggerated profits.
– Joint liability mechanism for violations: if involved in fraud, they may bear civil and criminal liabilities.
The industry believes that this move will help establish a fairer and more transparent marketing environment, allowing consumers to better identify the sources of information.
Underlying Thought of the Bill: Filling the Regulatory Gap of “Non-Professional Promoters”
Compared to the official draft, which focuses solely on operators and trading platforms, Huang Shanshan’s version demonstrates a forward-looking understanding of “new influential roles.” By explicitly defining KOLs, legislators hope to fill the current gaps in financial supervision that have not covered non-financial professionals engaged in investment influencing behaviors under the guise of entertainment or community engagement.
Virtual Asset Advertising to Enter a “New Era of Compliance”
As regulations for virtual assets gradually take shape, if KOLs fail to disclose collaborations or disseminate misleading information in the future, it may no longer be seen as “playing with fire,” but rather as illegal behavior. The introduction of Huang Shanshan’s draft not only imposes constraints on the market but also offers an opportunity to rebuild trust within the entire industry.
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