The co-CEO of Cube Entertainment was accused Wednesday by prosecutors of some serious fraud and false advertising. Kang Seung-gon had allegedly scammed investors through EGG (a local cryptocurrency dubbed Nestree). He falsely convinced them they’d get a multiple return of what they first deposited.
In March 2022, the entertainment company managing K-pop groups like (G)I-DLE and Pentagon, Cube Entertainment, invested 100 million Korean won, around $68,000, into Nestree Media Group, which owns the cryptocurrency. After the report, Nestree’s value had risen from 5 won to 50 won within a month. Many thought that Cube’s investment would propel the coin further.
However, Nestree’s price soon fell dramatically, to a single digit, by the end of 2022, when many investors faced huge losses. One investor lost more than 70 million won after investing 80 million won, or $55,000. When Kang was asked by the investor to help recover his lost funds, Kang denied that he ever promised such a thing and stated the reports were untrue.
Kang, who also owns 40% of Cube, has denied the allegations, saying he never promised returns on the investment. He said that the claims are “groundless” and that his involvement with Nestree was part of Cube’s strategy to expand into blockchain technology. Kang also said that he lost money in the investment and has not profited from the deal.
While Kang and Cube deny any wrongdoing, some investors are now considering taking legal action. The scandal has already affected the stock of Cube Entertainment, with the value dropping nearly 7% this year.
