Key Takeaways
- Cube Entertainment’s CEO, Kang Seung-gon, is accused of promoting a crypto scam.
- Investors suffered losses of up to 90% after buying into the Nestree token.
- Kang denies all allegations, maintaining the company’s ongoing investment in Nestree.
Cube Entertainment, a powerhouse in South Korea’s K-pop industry, finds itself at the center of controversy as its CEO, Kang Seung-gon, faces accusations of orchestrating a crypto pump-and-dump scheme.
The entertainment giant, known for managing several successful K-pop artists since its inception in 2008, now confronts potential legal repercussions tied to the crypto sector.
Legal Troubles Loom for Cube Entertainment CEO
Reports indicate that in March 2022, Cube Entertainment announced a substantial investment of 100 million won for a 40% stake in Nestree Media Group, a blockchain firm running an online store called “Nestree Mall” using its namesake token.
This announcement spurred a meteoric rise in the Nestree token’s price, surging from 5 won ($0.0034) to 50 won ($0.034), a staggering 100-fold increase.
Allegations indicate that CEO Kang leveraged his influence, encouraging close associates to invest in Nestree with promises of “guaranteed returns” and privileged information on new coin listings.
However, as the crypto market downturn took hold, Nestree’s value plummeted, resulting in investors incurring losses of up to 90%.
One investor, who reportedly lost 70 million won ($47,702) of his 80 million won ($54,500) investment, lamented the widespread belief in Kang’s assurances, which led many from the securities industry and private loan sectors to invest heavily, only to see their savings evaporate.
Cube’s Defense Amid Scandal
In response to the allegations, CEO Kang has vehemently denied any wrongdoing.
He dismissed the accusations as “completely groundless,” asserting there was no instance of recommending cryptocurrency investments with guaranteed returns.
Kang emphasized Cube Entertainment’s ongoing commitment to its investment in Nestree, framing it as part of the company’s broader strategy to expand into blockchain technology.
Despite these denials, the potential for legal action remains as disgruntled investors weigh their options.
If pursued, the case could have significant implications for Cube Entertainment and the regulatory environment surrounding South Korea’s blockchain industry.
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