Emily Walker
The CEO of Cube Entertainment, a leading K-pop agency, is facing serious allegations of involvement in a cryptocurrency investment fraud. He is accused of manipulating the company’s influence to boost the value of a questionable crypto token, which may lead to legal repercussions.
Controversy Surrounds Cube Entertainment’s CEO
On Thursday, a local news source reported that Kang Seung-gon, the CEO and majority shareholder of Cube Entertainment, is under scrutiny for his role in a crypto scheme that dates back to 2022. Allegations suggest that he utilized the agency to artificially inflate the price of a cryptocurrency and allegedly urged those close to him to invest.
In March 2022, Cube made a 100 million won investment (approximately $67,834) in Nestree Group Media (NMG) during the company’s capital expansion, securing a significant 40% share in the blockchain firm.
Following the news of Cube’s investment, the price of Nestree’s cryptocurrency, known as EGG, surged tenfold within a month, rising from 5 won (around $0.0034) to approximately 60 won (about $0.041) by March 28, 2022.
However, by the next month, Nestree’s price fell by 34% and continued to drop, ultimately reaching 5 won the following year. Currently, EGG is trading at 4.8 won, which is about $0.0033 on the Bithumb exchange.
Nestree Group Media previously listed its token on major South Korean exchanges, Coinone and Bithumb, between August 2019 and April 2020, branding itself as a messenger service tailored for blockchain communities.
The report states that the company appears to have halted its primary operations. Although Nestree Mall, which was intended for crypto market rewards, remains operational, it has either run out of stock or ceased all products.
Kang’s Denial of Scam Participation
Kang is accused of leveraging his position to persuade his connections to buy into Nestree’s token both before and after Cube’s investment, purportedly assuring them their initial returns would be secure.
An investor recounted, “In early 2022, Mr. Kang asked me to invest, promising, ‘I will guarantee the principal, so please trust me.’ This led many, including investors from securities firms and even loan sharks, to jump into investing,” the individual claimed.
Another investor mentioned that they trusted Kang and invested nearly 80 million won in Nestree in March 2022 but experienced a loss exceeding 70 million won when the token’s value deteriorated.
Investors who suffered losses reportedly approached Kang for assurance on their principal investment, only to be informed that he had never guaranteed such terms. Instead, they were allegedly offered new investment opportunities to recover their losses through alternative cryptocurrencies.
Kang has firmly denied all allegations, asserting that he and Cube Entertainment have not engaged in any scams related to cryptocurrency. He highlighted the absence of proof linking them to any investment recommendations that guaranteed principal returns.
Kang declared that Cube’s investment in NMG was a strategic move to expand into the blockchain arena, stating the company intends to continue collaborating with Nestree. He also mentioned that he did not benefit from selling EGG at its peak but rather incurred losses.
Despite his denial, individuals claiming to be victims of the situation are contemplating taking legal action against Kang.
