South Korean prosecutors have raided the headquarters of HYBE Corporation, the entertainment giant behind the global sensation BTS, amid allegations of insider trading. The Seoul Southern District Prosecutors' Office conducted a search and seizure operation on May 29, 2025, as part of an investigation into a HYBE executive, identified as Mr. A, suspected of using undisclosed information to gain illicit profits.

Authorities believe Mr. A purchased shares of YG Plus, a subsidiary of YG Entertainment, in early 2021 after learning in advance about HYBE's planned investment in the company. It is alleged that Mr. A profited approximately 240 million KRW (around $175,000) from this transaction, exploiting his inside knowledge of the impending deal.

A HYBE spokesperson has stated that the company is cooperating with the authorities' request for materials related to the former employee, who has already left the company.

Adding to the company's woes, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency has also applied for a search warrant to investigate HYBE's chairman, Bang Si Hyuk, over alleged fraudulent trading practices. Bang is accused of misleading shareholders in late 2019 by claiming there were no plans for a public listing, only to proceed with the company's IPO shortly afterward. The Financial Supervisory Service (FSS) is also reviewing the case.

Specifically, the FSS suspects that Bang concealed his plans for an Initial Public Offering (IPO) from investors back in 2019, when HYBE was still known as BigHit Entertainment. It's alleged that Bang told venture capitalists and institutional investors that there were no immediate plans for the company to go public, which led many of them to sell their shares, anticipating limited profit potential without an upcoming stock listing.

Further investigation revealed that Bang had a secret agreement with a private equity fund (PEF) established by an acquaintance. According to the agreement, Bang was entitled to 30% of the profits from the PEF's investment, derived from buying undervalued shares and selling them after HYBE's IPO. This arrangement, which reportedly earned him around 400 billion KRW (approximately $290 million), was never disclosed in the company's official filings, potentially violating South Korea's capital market law.

If convicted of fraudulent trading, Bang Si Hyuk could face severe penalties, including a minimum of five years in prison or, in extreme cases, a life sentence, particularly if the profit earned from such activities exceeds 5 billion KRW.

The simultaneous investigations have cast a shadow over HYBE, raising concerns among fans and investors alike. While HYBE operates under a multi-label system and BTS is capable of making a comeback independently, the probe into Bang Si-hyuk has stirred unease among fans. The outcome of these investigations could have significant repercussions for the future of HYBE and its position in the global K-pop industry.