Kang Seung-kon, a director at major South Korean production house Cube Entertainment, is suspected of deceiving crypto investors, according to local outlet Hankyung.
According to unnamed sources, he urged acquaintances and colleagues to invest in the Nestree (EGG) cryptocurrency issued by blockchain project Nestree Media Group. Kang also allegedly guaranteed the return of capital.
In March 2022, Cube Entertainment invested 100 million won in the project (about $80,000 at the time). On the news of the investment, Nestree’s price rose tenfold within a month—from 5 to 50 won (from $0.0034 to $0.034).
By the end of 2022, the token’s price had fallen back to around five won. Investors demanded compensation. In response, Kang said he had never guaranteed profits and proposed alternative investments that “would help recoup” the unsuccessful bets.
“Kang recommended investing in early 2022, saying ‘I guarantee a return of capital, so trust me and buy.’ People in the securities industry, Cube Entertainment officials and private moneylenders believed his words and rushed to invest in Nestree,” said one of the victims.
Angry investors intend to hold the entrepreneur accountable in court.
At the time of writing, Nestree is trading at $0.0032 with a market capitalisation of about $9.2 million.
Cube Entertainment’s share price on South Korea’s Kosdaq has so far shown little reaction to the news.
In December, the founder of the Mira charity memecoin was suspected of fraud.