According to an exclusive report by the Korea Economic Daily, Kang Seung-gon, the largest shareholder of the well-known South Korean entertainment company CUBE Entertainment, is accused of promoting a fraudulent cryptocurrency called EGG (Nesttree) to acquaintances and company employees. The coin surged tenfold in just one month after news of its collaboration with CUBE emerged, but has now fallen below its opening price, trading at around 4.85 Korean won as of the time of writing.
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ToggleCube Invests in Blockchain Company, Then Disappears
Nesttree Media Group operates an e-commerce service called Nestre Mall that uses the Nestree cryptocurrency, and also has social media and Non-Fungible Token (NFT) related businesses. The article states that in March 2022, CUBE Entertainment participated in a capital increase at Nesttree Media Group, investing 100 million Korean won and acquiring a 40% stake in the company. The price of Nesttree was around 5 Korean won in February 2022, but after the news of CUBE's investment, its price soared to 50 Korean won, a tenfold increase in just one month.
However, the main service, the community, has now ceased operations, and while Nesttree Mall has not been taken down, all products are marked as sold out. The price of EGG has also been steadily declining since April 2022, dropping more than 90%.
Victims Include Securities Companies, CUBE Entertainment Employees, and High-Interest Lenders
Victim A said that Kang Seung-gon had recommended the investment as early as the beginning of 2022, and had promised to guarantee the principal, so he felt safe investing. He added that many people, including securities companies, CUBE Entertainment employees, and private high-interest lenders, believed Kang Seung-gon's words. Another investor, Mr. B, who invested around 80 million Korean won in Nesttree in March 2022 based on Kang's recommendation, lost more than 70 million Korean won as the value of Nesttree plummeted.
The report also mentions that Kang Seung-gon claimed he would provide victims with insider information on the listing of other cryptocurrencies on exchanges to compensate for their investment losses. CUBE Entertainment even announced at the end of last year that it planned to use this type of token as a payment method for its subsidiaries.
Kang Seung-gon: No Promotion of Principal-Protected Investments, Will Continue Cooperation with Nesttree
Kang Seung-gon stated that the allegations of his involvement with CUBE Entertainment in a fraudulent cryptocurrency scheme are completely unfounded, and that there is no fact of him recommending cryptocurrency investments with a guarantee of principal protection. He said that CUBE Entertainment's participation in the capital increase of Nesttree Media Group was part of their efforts to expand their blockchain business, and they plan to continue their business cooperation with Nesttree in the future.
(G)I-DLE's CEO Previously Launched a Music Metaverse Platform
CUBE Entertainment's well-known artists include the girl group (G)I-DLE, whose members include Soyeon, Miyeon, Yuqi, Minnie, and Shuhua. Kang Seung-gon is also a major shareholder of the emerging skincare brand VT, whose micro-needle essence has gained significant popularity in Taiwan. Additionally, CUBE Entertainment previously collaborated with Animoca Brands to launch a music Metaverse platform.
Risk Warning
Cryptocurrency investments carry a high degree of risk, and their prices may fluctuate dramatically. You may lose your entire principal. Please carefully evaluate the risks.
