Legislator Huang Shanshan's version of the encryption draft includes KOLs! The chaotic advertising of virtual assets will be regulated by law.

In the increasingly hot virtual asset market, influencers and Key Opinion Leaders (KOLs) vigorously promote tokens, platforms, and Decentralized Finance (DeFi) projects, which have become commonplace. In order to curb hidden misguidance and fraud risks, the latest draft of the "Virtual Asset Service Act" proposed by People’s Party legislator Huang Shanshan clearly includes the definition and regulatory ideas of "Key Opinion Leaders (KOLs)" for the first time, which is expected to bring significant impact to the virtual asset marketing ecosystem across Taiwan.

( Legislative Member Huang Shanshan's public hearing on the cryptocurrency special law｜The Financial Supervisory Commission's Securities and Futures Bureau responds to the public, leaving room for cryptocurrency derivatives, and there are ways to regulate Key Opinion Leaders )

"Key Opinion Leader" KOL officially enters the law and will become a regulatory subject.

According to the definition in Article 3 of Huang Shanshan's draft, "Key Opinion Leader" refers to those who regularly share information online for public viewing and profit from their social influence. This means that YouTubers, streamers, bloggers, Twitter (X) KOLs, Threads creators, etc., who earn profits by promoting virtual assets, may be subject to regulation by the Financial Supervisory Commission in the future.

This move addresses the increasingly rampant marketing chaos in the current market, such as "celebrity endorsement scams" and "exaggerated return guarantees," especially since many Key Opinion Leaders are not licensed financial operators but recommend virtual assets, which can easily mislead ordinary investors.

Advertising formats across multiple platforms are restricted, including live broadcasts, short videos, and posts.

The draft goes a step further by naming the media and platforms covered by KOL marketing, from Facebook, Instagram and YouTube to Discord, 17 Live and even emerging communities such as Threads. Its application is not limited to videos and posts, but also includes live programs and community interaction.

This move is equivalent to drawing a red line in the industry: as long as a Key Opinion Leader is involved in promotional activities related to virtual assets, they should be subject to legal regulations and responsibilities, even if they are not part of the platform or the project issuing team.

Expected Impact: Increased investor protection, KOLs must disclose advertising collaborations.

Although the draft does not yet specify detailed penalties, the competent authority may establish subsidiary regulations based on the authorization in the future, targeting Key Opinion Leaders (KOL):

Cooperation disclosure obligation: must indicate whether it is a paid promotion.

Prohibit false information or exaggerated returns.

Joint and several liability mechanism for violations: If you participate in fraud, you may bear civil criminal liability.

The industry believes that this move helps to establish a fairer and more transparent marketing environment, allowing consumers to more confidently identify the source of information.

The thinking behind the bill: Filling the regulatory gap for "non-professional promoters"

Compared to the official draft, which focuses only on operators and trading platforms, the Huang Shanshan version demonstrates a forward-looking understanding of the "new influential roles." By explicitly defining KOL, legislators hope to fill the gaps currently not covered by financial supervision, namely those non-financial professionals who engage in investment influencing behaviors under the guise of entertainment or community.

Virtual asset advertising will enter a "compliance new era".

As the legal regulations for virtual assets gradually take shape, in the future, if KOLs do not disclose collaborations and spread misleading information, it may no longer be a "gray area," but rather an illegal act. The proposal of Huang Shanshan's draft is not only a constraint on the market but also brings an opportunity for the entire industry to rebuild trust.

This article discusses the draft cryptocurrency bill by legislator Huang Shanshan, which includes the management of KOLs! The chaotic situation of virtual asset advertising will be regulated by law, first reported by Chain News ABMedia.