Financial Supervisory Commission: Cryptocurrency KOLs engaging in order-following behavior will be regulated, with rules set through subregulations of the Financial Consumer Protection Act

As the enthusiasm for virtual currency investments heats up, “crypto influencers” and group trading schemes have become widespread. Members of the Legislative Yuan’s Finance Committee are concerned about whether these activities involve market manipulation or misleading investors. On March 23, Chairperson Peng Jinlong of the Financial Supervisory Commission stated that relevant behaviors will be regulated through subsidiary laws authorized under the Financial Consumer Protection Act to establish an orderly market.

Current regulations are insufficient, and group trading behaviors effectively involve investment advice.

Legislator Li Yanshou pointed out that although existing regulations prohibit actions intended to influence prices, the market is still filled with teaching calls and group entry/exit behaviors, which essentially constitute investment advice. He urged the FSC to clarify whether future virtual asset analysis and advisory activities will be included within the scope of regulation.

Peng Jinlong responded that similar behaviors are already regulated in traditional financial markets, such as influencer promotions of financial products, which are subject to certain restrictions. In the future, the subsidiary laws authorized under the Financial Consumer Protection Act could regulate financial service providers’ advertising, solicitation, and promotional activities conducted through KOLs (Key Opinion Leaders).

The Democratic Progressive Party version: requiring VASPs to disclose information and prohibiting misleading promotions.

In terms of legislative direction, the DPP version has clearly included regulation of “Key Opinion Leaders,” focusing on three key points:

• Requiring virtual asset service providers (VASPs) to disclose company name and licensing information in advertisements and marketing.

• Banning false or misleading promotions.

• Regulating that KOLs must meet certain qualification criteria.

Practical implementation faces difficulties, and the industry adopts self-regulation mechanisms.

Financial industry insiders admit that in practice, requiring KOLs to meet specific qualification criteria is extremely challenging. Currently, the Securities Investment Trust and Consulting Association has established a self-regulatory mechanism for cooperation between fund companies and influencers, which involves signing cooperation agreements, incorporating these into internal control systems, and regularly reviewing compliance with marketing regulations.

This discussion is part of Taiwan’s overall legislative process for the draft Virtual Asset Service Provider Act. As the VASP registration system is gradually implemented, enhanced regulation of KOL group trading behaviors will be a key step toward completing Taiwan’s cryptocurrency regulatory framework.

This article, “Financial Supervisory Commission: Planning to Regulate KOL Group Trading Activities in the Crypto Space through Subsidiary Laws under the Financial Consumer Protection Act,” first appeared on Chain News ABMedia.