South Korean K-pop giant Cube Entertainment's CEO was accused of involvement in cryptocurrency investment fraud, causing the stock price to drop by nearly 2%.

On January 10, according to The Block, Hong Seong-seong, the CEO and largest shareholder of South Korean K-pop giant Cube Entertainment, was accused of misleading investors to invest in the cryptocurrency Nestree. According to the South Korean Economic Daily, Cube invested KRW 100 million (approximately USD 68,000) in Nestree Media Group in March 2022. Since then, the price of Nestree has big pumped nearly ten times to 50 Korean won within a month.

The victims claimed that Hong Chengcheng promised to guarantee the principal during the price increase, but denied the related promises when the Nestree coin price plummeted to single digits. Currently, the Nestree coin price has fallen to 4.9 Korean won, and investors are considering taking legal action. Hong Chengcheng denied the allegations and stated that this is part of the company’s blockchain business expansion plan.

As a result, Cube Entertainment’s Kosdaq stock price fell 1.9% to 14,450 won on Friday, with a 7.4% decline from the beginning of the year. The company currently manages well-known artists such as (G)I-DLE and Pentagon, with revenue reaching $109 million in the first three quarters of 2024.