In early 2022, Cube Entertainment CEO made waves in the cryptocurrency world with a significant business move. This is the origin of Cube Entertainment Crypto Issue, wherein the company invested 100 million Korean won (about $68,376) in Nestree Media Group. This investment gave Cube Entertainment a 40% stake in the blockchain company.

Key-Takeaways:

• The company that was accused of misleading investors about Nestree cryptocurrency returns—Nestree made $68,376 but saw a price spike, followed by a price crash—is now facing Cube Entertainment CEO Kang Seung-kon’s accusations that he failed to deliver on returns.
• The token’s collapse from 59 won to 4.9 won means investors who say they were promised guaranteed returns incurred major losses.
• In one of several high-profile cases facing cryptocurrency regulators, South Korean authorities are investigating the case under strict cryptocurrency regulations, yet affording it severe penalties for proven fraud.

The Cryptocurrency in Question

Nestree Mall is both an e-commerce platform and a cryptocurrency called Nestree. Nestree’s token traded at around 5 won in February 2022 before Cube’s involvement. When Singapore-based company Annppy announced the partnership with Cube Entertainment, the price of the coin jumped to 50 won. This attracted many investors to this massive price increase.

There have been serious allegations by several investors against Cube Entertainment’s CEO, Kang Seung-kon. According to them, during the period when Nestree was part of the company, Kang asked people to invest in Nestree tokens. One investor says Kang promised that he would guarantee their initial investment. After the token’s value took a sharp hit, you saw this investor lose roughly 70 million won.

The Defense of Cube Entertainment CEO

He very adamantly denies any guarantees as to the value of investment returns. Cube says it only invested in Nestree because it was a business decision. CEO said they introduced this because of their plan to expand into blockchain technology. “They will work with Nestree in the future,” he said.

Looking at Nestree’s price history is concerning. On March 28, 2022, the token hit its highest price of 59 won. Over the course of just one month, the won plunged 34 percent to 39 won. And it continued on into 2022. Nestree is currently traded on approximately 4.9 Won on Bithumb exchange.

Impact on Nestree’s Business

The Cube Entertainment Crypto Issue has affected Nestree’s operations significantly.  They’ve completely stopped their Messenger service. Their e-commerce platform is still technically open, but no current products can be seen. We are also selling all the items that are either sold out or discontinued.

Cryptocurrency fraud is very serious in South Korea. In turn, the country’s Financial Supervisory Service enforces hard and fast laws to protect crypto investors. Under the current regulations, crypto fraud of more than $4m can lead to life imprisonment. Based on that, the authorities are actively investigating market manipulation and insider trading cases.

How would this impact both K-pop and the Crypto Landscape?

The incident stands as just the latest in a growing trend of K-pop entertainment companies behaving in this way. The majority of company leaders attempt to copy tech entrepreneur’s success. But this is the risk of deviating from business strengths in core entertainment. The case shows that combining entertainment companies with risky cryptocurrency investments is dangerous.

Generally, once K-pop fans are into a company, they’re very loyal to the company. But it has, however, taken its toll on the relationship between Cube Entertainment and its fans. Now many fans who invested because they trusted the company have been betrayed. And if this is a breaking of trust that may possibly have long-lasting ramifications for the reputation of Cube Entertainment, then so be it.

Conclusion: Cube Entertainment Crypto Issue

South Korean authorities are investigating the case. All crypto-related crimes will be looked into and examined carefully, a sign of their thorough approach to crypto-related crimes. Warning: Do not mix entertainment business with cryptocurrency investments. It also turned again to how easily trust can sour when promises at the expense of cash don’t live up to the hype.