K-pop CEO accused of crypto scam

The worlds of K-pop and crypto have collided as Cube Entertainment’s co-CEO Kang Seung-kon faces allegations of falsely promising guaranteed returns to cryptocurrency investors.

At the center of the controversy is Nestree, a cryptocurrency created by South Korean blockchain firm Nestree Media Group. In March 2022, Cube Entertainment invested approximately $68,000 in Nestree, causing the token’s value to spike tenfold—from five won to 50 won ($0.003 to $0.03 at the time of writing)—in a month. Many speculated that the partnership signaled future collaborations with the K-pop giant.

During this surge, Kang reportedly encouraged colleagues and acquaintances to invest in Nestree, allegedly guaranteeing they’d recover their original funds. However, as Nestree’s value collapsed—trading at just 4.9 won today—investors claim Kang denied making such promises. He allegedly advised them to explore other crypto projects to recoup their losses.

Kang denies the accusations, stating he never guaranteed returns. He described Cube’s investment as part of its broader blockchain ambitions, which included a 2022 NFT partnership with Animoca Brands.

Some investors are reportedly considering legal action, accusing Kang of exploiting his position to lure them into risky investments. Cube Entertainment, known for managing K-pop stars like (G)I-DLE and Pentagon, has yet to comment.

Cube’s stock has fallen 7.4% this year, with a 1.9% drop following news of the allegations, according to Google Finance. The case highlights the risks of investing in cryptocurrencies tied to high-profile individuals or companies, reminding beginners to avoid promises of guaranteed returns and research projects thoroughly.