Controversy Surrounding Cube Entertainment CEO
Allegations Against K-Pop Entertainment Leader
The CEO of Cube Entertainment, a major player in the K-pop industry, is currently embroiled in controversy following accusations of his involvement in a cryptocurrency investment scam. Allegedly, he manipulated the entertainment company’s influence to artificially increase the value of a disputed crypto token, which now places him at risk of facing legal challenges.
Details of the Accusations
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Recent reports from local news outlets have brought to light that Kang Seung-gon, the CEO of Cube Entertainment, is implicated in a cryptocurrency scheme dating back to 2022. Kang, who holds a significant share in the company, is accused of strategically using Cube Entertainment’s reputation to boost the cryptocurrency’s value, enticing those within his circle to invest in the token.
In a notable move in March 2022, Cube Entertainment invested 100 million won—approximately $67,834—in Nestree Group Media (NMG) through a capital increase initiative. This investment secured Cube a substantial 40% stake in this blockchain enterprise. Reportedly, the Nestree (EGG) cryptocurrency saw its value skyrocket tenfold within a month following news of Cube’s investment, climbing from 5 won (around $0.0034) to approximately 60 won (about $0.041) by the end of March 2022.
Fluctuations in Cryptocurrency Value
However, the surge was short-lived, as Nestree’s value plummeted by 34% the subsequent month, eventually returning to the 5-won level over the following year. At present, the token is trading at 4.8 won, which equates to about $0.0033, on the Bithumb exchange.
It’s important to highlight that Nestree Group Media originally introduced its token to South Korean exchanges Coinone and Bithumb between August 2019 and April 2020, with claims of being a blockchain-based community messaging service. According to the reports, the company’s core operations have been largely halted, although Nestree Mall, its crypto-centric reward-based shopping platform, remains operational despite having sold out or discontinued its products.
Response and Denials from Kang
Kang is accused of leveraging his position to persuade colleagues and associates to purchase Nestree’s token, allegedly assuring them of a guaranteed return on their investments. An investor stated, “In early 2022, Mr. Kang urged me to invest, promising, ‘I will guarantee the principal, so please trust me.'” As a result, securities firms, officials from Cube Entertainment, and even loan sharks were reportedly drawn to invest in Nestree.
Another investor recounted that they were convinced by Kang’s assurances and invested approximately 80 million won in March 2022, only to incur losses exceeding 70 million won when the token’s value plummeted. Investors have reportedly approached Kang to fulfill his promise to secure their principal investments, but were instead informed that no such promises were made. Some investors were allegedly offered new investment opportunities by Kang, with assurances that these would help offset their losses through other cryptocurrencies.
Despite the mounting allegations, Cube’s CEO has firmly denied any involvement in a crypto scam. Kang has stressed that neither he nor Cube Entertainment engaged in any fraudulent activities related to cryptocurrency investments. “There is no evidence that we recommended a cryptocurrency investment under the condition of a principal guarantee,” Kang stated.
He further explained that Cube Entertainment’s investment in Nestree Group Media was a strategic move in their expansion into the blockchain sector, and they intend to persist in their collaborative efforts with Nestree. Kang concluded his defense by asserting that, despite having invested in EGG before Cube’s partnership, he did not reap profits from selling at the peak, and instead, suffered financial losses.
As investigations continue, the alleged victims are contemplating legal action against Kang, seeking justice and reparation for their financial losses.
