GEM Digital reproduces capital manipulation games? Praxis secures over $500 million in financing "commitment," but the funds have not actually arrived
Recently, the project Praxis, claiming to be the world's first network state, announced that it has secured up to $525 million in funding, attracting significant attention. However, the previous investment controversies surrounding the participating party GEM Digital have cast doubt on this substantial financing.
Author: Nancy, PANews
As leaders like Vitalik and Balaji advocate for network nations, more builders are joining in and opening up growth space for this narrative. Recently, the self-proclaimed world's first network nation project, Praxis, announced it has raised up to $525 million in funding, attracting significant attention. However, the previous investment controversies surrounding GEM Digital, one of the investors, have cast doubt on this substantial financing.
Announcing Over $500 Million in Funding Again, Aimed at Building a Cutting-Edge Tech City
On October 16, Praxis announced it has secured $525 million in funding, which will be used to accelerate the speed and quality of transactions with governments and landowners to build a cutting-edge tech city.
The current investors include Arch Lending, GEM Digital, Manifold Trading, as well as Dan Romero, CEO of Farcaster, Tom Schmidt, partner at Dragonfly, Rob Hadick and Anirudh Pai, CEO of ETHGlobal Kartik Talwar, CEO of Helius Labs Mert, co-founder of Worldcoin Max Novendstern, and data scientist Will Price from Flipside Crypto.
Previously, Praxis also raised $4.2 million in seed funding in 2021, with participation from Bedrock Capital , Winklevoss Capital , and Alumni Ventures , and completed a $15 million Series A round in 2022 with investments from Paradigm , Alameda, Three Arrows Capital, and Robot Ventures.
Founded in 2021 and led by 28-year-old co-founder Dryden Brown, Praxis is described on its official website as an internet-native alliance aimed at accelerating technological advancement and revitalizing Western civilization, with over 14,000 Praxians spread across 84 countries, whose companies have a combined value exceeding $400 billion.
One of Praxis's core goals is to build a new city for three reasons: (1) Unlocking technological and scientific potential: Building cities in talent-dense acceleration zones reduces regulatory barriers, thus promoting rapid development in fields such as artificial intelligence, cryptocurrency, biotechnology, and energy; (2) Creating a more courageous and beautiful way of life: through cultural and institutional development; (3) Demonstrating to the world the possibility of establishing great cities in the 21st century.
According to The Wall Street Journal, Praxis has not yet determined a specific city location, but Latin America and the Mediterranean region are potential candidates, with a final decision expected in the first quarter of 2025. Dryden Brown revealed that the initial plan covers approximately 1,000 acres of land, accommodating 10,000 people.
Additionally, Zaha Hadid Architects has provided a conceptual plan for the urban development of Praxis, combining futurism with classical aesthetics and scalable urban planning, with development work led by former Howard Hughes Corporation CEO David Weinreb.
GEM Digital as the Lead Investor, Previously Accused of Fraudulent Financing Information
Despite the growing popularity of the network nation concept, Praxis's large-scale financing is surprising, and GEM Digital's involvement has raised significant doubts about this investment.
"Seeing institutions like BlackRock committed to cryptocurrency, we designed a crypto-native mechanism that uses tokenized real-world assets (RWA) to finance large projects and partnered with the largest new city development project in the Middle East, Global Emerging Markets. This financing is also the first application of this withdrawal mechanism," Praxis stated in its financing announcement. This financing mechanism typically refers to borrowers being able to withdraw funds gradually over a specific period based on project progress or needs, rather than receiving all funds at once.
In fact, according to The Wall Street Journal, GEM Digital CEO Jonathan Collins disclosed that the company contributed $500 million of the funding. In return, Praxis must provide GEM with tokens representing future real estate development ownership, meaning that Praxis can only access this funding after the tokens are launched. The remaining funds will also be disbursed in phases based on milestone events, such as obtaining local government permits, purchasing construction land, tokenizing land ownership, and starting construction.
This performance-based investment is a common tactic for GEM Digital. According to previous reports by PANews and Chain Catcher, "investment commitments" are a common trick used by GEM, with dozens of unknown crypto projects announcing financing news through investment commitments, while in reality, GEM signs so-called large investment agreements with junk project parties to create market-positive news to deceive the media, collaborating to profit and share the gains. Some crypto projects have even disclosed that GEM Digital's investment funds are not directly transferred but are filled by profits from selling tokens.
Additionally, The Wall Street Journal reported that Arch Lending will provide the remaining $25 million in funding, meaning that the combined investment from these two institutions has reached $525 million. Does this imply that the other investors are merely nominal and not contributing funds?
From this perspective, Praxis may once again be a capital manipulation game orchestrated by GEM Digital.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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