Hybe Co., label behind K-pop superstar BTS, has entered an equity-based strategic alliance with Dunamu Inc., operator of South Korea’s top cryptocurrency exchange Upbit, to leverage on BTS and other artist pool for non-fungible token (NFT) business.

Under the agreement, Hybe will buy 861,400 shares in Dunamu for 500 billion won ($423.8 million) while Dunamu acquires 2,302,570 shares in Hybe for 700 billion won. The exchange would make Hybe an owner of a 2.25 percent stake in Dunamu, and Dumamu 5.57 percent in the former. The transactions will be made on Nov. 24.

On Thursday, Hybe shares rose 2.89 percent to close at 356,500 won. Dunamu is not listed.

The stock exchange backs the two companies’ business partnership in NFT. The two plan to create NFTs and related digital assets based on Hype’s star entertainers including BTS, Tomorrow x Together, Seventeen and NU`EST.

They will also seek to market K-pop-themed digital merchandise to provide easier access for fans across the world.

Entertainment industry has been rapidly adopting blockchain technology and digital assets such as NFT to better protect music copyrights and such intangible assets as streaming has become a norm in the media industry. The rise of streaming services has allowed fans to easily access music and share them with others instead of buying hard copies like compact discs at stores, but this also has created a headache for music artists, such as unauthorized copying of songs.

NFT release of songs also provides fans with an opportunity to own the authentic version of music artworks.

Bang Si-hyuk, Hype’s founder and chief executive officer, at an online IR event on Thursday unveiled his vision to grow his company beyond music creation and star management to become a global entertainment platform, offering a wider variety of services from e-commerce to video game and education based on its creative artworks.

By Cho Jeehyun

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