CEO of Cube Entertainment, the agency of (G)I-DLE, accused of cryptocurrency scam

Kang Seung-gon, the CEO of VT, the KOSDAK listed company and Cube Entertainment, the agency of several K pop bands, has been accused of a cryptocurrency investment scam.

According to a report by The Korea Economic Daily on Oct. 10, Kang allegedly encouraged people around him to invest in cryptocurrency by saying that he would "guarantee the principal amount." Some investors invested tens of millions of won, only to see the value of the coins plummet and suffer huge losses.

The cryptocurrency Kang recommended is known as Nestree. In March 2022, Cube Entertainment participated in the capital increase of Nestree Media Group and acquired a 40 percent stake in the company, with an investment of about 100 million won. Nestly Media Group operates an e-commerce platform utilizing blockchain technology and is also engaged in NFT-related business.

Once the news of Cube Entertainment's investment became public, the price of the cryptocurrency Nestree skyrocketed. The coin, which was in the 5 won range before the announcement, rose to 50 won within a month, a nearly 10-fold increase. However, the price has since continued to decline and stood at 4.936 won as of Tuesday morning.

A man who invested 80 million won in Nestree said, "Securities industry officials and loan sharks trusted Mr. Kang's words and jumped into the investment. However, the value of the coin plummeted and he lost more than 70 million won." "I asked him to guarantee the principal as promised, but he replied that he had never made such a promise," he complained."

In response, CEO Kang Seung-gon completely denied the allegations and said, "I never made an investment recommendation under the condition of guaranteeing the principal amount." He also said that Cube Entertainment's capital increase is part of the expansion of its new blockchain business and that they will continue to cooperate in the future. "I personally invested, but I lost money," he emphasized."

The controversy has drawn attention to Kang and Cube Entertainment's next steps.