South Korea is becoming one of the leading crypto hubs in Asia. Their love for crypto and XRP investment amid a declining Won has set citizens up for major digital asset investments.
What’s more popular than crypto in South Korea? The K-pop industry. K-pop idols have taken over entertainment industries across the globe. Now, we are at an intersection of both. A K-pop entertainment CEO has been tied to a crypto scam project.
On Thursday, Kang Seung-kon, Cube Entertainment’s largest shareholder, urged acquaintances and colleagues to invest in Nestree, a cryptocurrency developed by the South Korean blockchain company Nestree Media Group. The main allegation is that he deceived investors into investing in local crypto by fraudulently guaranteeing returns.
🇰🇷 Latest: K-pop's @cubeunited co-CEO Kang Seung-kon is accused of misleading investors into buying Nestree ($EGG) cryptocurrency with false return guarantees, as the token surged post-Cube's $68K investment before collapsing.#KPOP pic.twitter.com/4ApgpXqWED
— CoinRank (@CoinRank_io) January 10, 2025
Additionally, in March 2022, Cube reportedly invested 100 million Korean won ($68,376) in Nestree Media Group through a capital increase. With the influence they carry, K-pop fans were quickly convinced.
The fans are now on their “oppa’s” neck in requisite of their principal amount after the crypto fell. However, Kang Seung-kon has denied them saying that he did not promise anything of that sort. CEO Kang emphasized that “there was no fact that I recommended cryptocurrency investment on the condition of guaranteeing the principal.”
He added, “Participation in the paid capital increase of Nestree Media Group was an investment made as part of Cube Entertainment’s expansion of its new blockchain business, and we plan to continue our business collaboration with Nestree in the future.”
Normally, Korean fans are very loyal, but they can still be bullies if they are crossed. This leaves the company in danger with the authorities and with their fans.
The crypto scam – Details
Kang Seung-kon invested in a paid-in capital increase by Nestree Media Group in March 2022 to secure a 40% stake in the company. After the news emerged that Cube Entertainment had participated in the legacy of Nestree Media Group, the price of Nestree rocketed.
We are thrilled to announce that Nestree has joined forces with @klaydice and Cube Entertainment to organize a blockchain consortium 😎
Check more details in this post 👇https://t.co/LdEApJB1Dn
— Nestree (@nestree_io) August 4, 2022
Notably, Nestree Media Group is an IT-based blockchain technology company. It operates an e-commerce ‘Nestree Mall’ using the crypto Nestree. It is also engaged in a business related to non-fungible tokens (NFTs).
Apparently, Nestree, which was trading in the 5-won range in February 2022, surged to the 50-won range following the announcement of the legacy. The news of the collaboration with Cube Entertainment literally resulted in a price increase of over tenfold in a month.
It has been alleged that CEO Kang recommended investment in Nestree to those in his vicinity. He did this during the period in which Cube Entertainment participated in the legacy of Nestree Media Group.
A person who invested in the crypto said, “CEO Kang recommended investment in early 2022, stating, ‘I will guarantee the principal, so trust me and buy.'” He added, “People in the securities industry, Cube Entertainment officials, and private loan sharks believed CEO Kang’s words and rushed to invest in Nestree.”
Another person believed CEO Kang’s statements and invested approximately 80 million won in Nestree. However, Nestree’s value plummeted, resulting in a loss of over 70 million won.
Nestree was listed on domestic crypto exchanges Coinone and Bithumb in August 2019 and April 2020, respectively. However, its current main business, the messenger, has effectively ceased operations. The ‘Nestree Mall,’ which offers discounts based on the amount of Nestree held, has not yet closed, but all registered products are sold out or have been discontinued.
Meanwhile, Nestree reached its highest point on March 28, 2022, at 59 won on the local exchange Bithumb. Subsequently, it experienced a 34% decline to 39 won within a month. According to Bithumb, the token’s price plummeted to single digits after 2022 and is presently trading at approximately 4.9 won.
What is next for Cube Entertainment
The South Korean government is taking no chances when it comes to guaranteeing transparency in cryptocurrency transactions. The Financial Supervisory Service (FSS) is enforcing the Virtual Asset Users Protection Act.
Insider trading, market price manipulation, and other unethical trading practices are among the actions that have been examined. The Korean authorities have become really good at catching scammers. Last year, they were able to track down lost cryptocurrencies that had been pointed to North Korea.
Notably, according to the regulations, cryptocurrency fraudsters are subject to severe repercussions, such as the possibility of life imprisonment for operations that exceed $4 million. South Korean authorities intend to guarantee cryptocurrency exchanges’ compliance and prevent unlawful activities by adopting a zero-tolerance policy. Well, the K-pop company might be in some big trouble.
This is the inevitable outcome of the trend of all these CEOs of K-pop companies desperately wanting to cosplay as their hero tech peers. However, in actuality, these allegations also elevate him to the same level as renowned figures such as the Hawk Tuah girl.
Also, it was inevitable that K-pop companies would either be taken over by these individuals or be captivated by line-go-up thinking, given their current status as significant businesses. However, it is disheartening that it appears that none of them are satisfied with simply operating a music business effectively.
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