GEM Digital reproduces the game of capital manipulation? Praxis received a 'commitment' of over 500 million US dollars in financing, but the funds did not actually arrive

Author: Nancy, PANews

As leaders like Vitalik and Balaji push for the rise of network nations, more and more builders are joining and opening up this narrative space. Recently, Praxis, claiming to be the world's first network nation project, announced a staggering $525 million financing, which has attracted significant follow-up. However, the investment scandal of the participating party GEM Digital has also raised questions about this huge financing.

Announces Over $500 Million in Financing Again for Building Technology Frontier Cities

On October 16, Praxis announced a $525 million financing, which will be used to accelerate the speed and quality of transactions with governments and landowners to build a tech-forward city.

This round of participants includes Arch Lending, GEM Digital, Manifold Trading, as well as Farcaster CEO Dan Romero, Dragonfly's partner Tom Schmidt, Rob Hadick and Anirudh Pai, ETHGlobal CEO Kartik Talwar, Helius Labs CEO Mert, Worldcoin co-founder Max Novendstern, and Flipside Crypto data scientist Will Price.

Prior to this, Praxis had raised a $4.2 million seed round in 2021, with participation from Bedrock Capital, Winklevoss Capital, Alumni Ventures, and completed a $15 million Series A round in 2022 with investment from Paradigm, Alameda, Three Arrows Capital, and Robot Ventures.

Praxis was established in 2021 and is helmed by 28-year-old co-founder Dryden Brown. According to the official website, Praxis is an internet native alliance aimed at accelerating technological progress and revitalizing Western civilization. It already has over 14,000 Praxians in 84 countries, and the companies founded by these members are valued at over 4 trillion dollars.

One of Praxis' core goals is to build a new city for three reasons: (1) unleashing the potential of technology and science: by reducing regulatory barriers by building cities in talent-intensive acceleration zones, it will drive rapid development in areas such as artificial intelligence, cryptocurrency, biotechnology, and energy; (2) creating a more heroic and beautiful way of life: through cultural and institutional building; and (3) to show the world the possibility of building great cities in the 21st century.

According to The Wall Street Journal, Praxis has not yet determined the specific city location, and Latin America and the Mediterranean region may be selected. The final decision will be made in the first quarter of 2025. Dryden Brown revealed that the initial plan for the project covers about 1,000 acres of land and can accommodate 10,000 people.

In addition, Zaha Hadid Architects has provided Praxis with a conceptual scheme for urban development, combining futurism with classical aesthetics and scalable urban planning. The development work will be led by David Weinreb, former CEO of Howard Hughes Corporation.

GEM Digital, as the financing leader, has repeatedly engaged in fraud with false financing information

Despite the growing popularity of the concept of network countries, the large-scale financing of Praxis is surprising, and the participation of GEM Digital has raised questions about this investment.

"Seeing institutions like BlackRock committing to Crypto Assets, we designed a tokenization-based mechanism for encryption, using Real World Assets (RWA) for large-scale project financing and partnering with Global Emerging Markets, the largest new city development project in the Middle East. This financing is also the first application of this withdrawal mechanism." Praxis stated in the financing statement. This financing mechanism typically refers to the borrower gradually withdrawing funds based on project progress or needs within a specific time frame, rather than receiving all funds at once.

In fact, according to The Wall Street Journal, GEM Digital CEO Jonathan Collins revealed that the company contributed $500 million. In return, Praxis needs to provide GEM with Tokens representing future real estate development ownership, meaning that only Praxis can receive the funds after the Tokens are launched. The remaining funds will also be released in stages according to milestone events, such as obtaining local government permits, purchasing construction land, tokenizing land ownership, and commencing construction.

In fact, performance-based investment is a common practice for GEM Digital. According to previous reports from PANews and Chain Catcher, 'investment commitments' are a common trick of GEM, and dozens of unknown encryption projects have announced financing news in the form of investment commitments. However, in reality, GEM has signed so-called large-scale investment protocols with trash project parties, creating market favorable information to deceive the media, collaborating to dump and share profits. There are even encryption projects that disclose that GEM Digital's investment funds will not be directly paid, but will be used to fill the investment funds after selling Tokens for profit.

In addition, the Wall Street Journal report also revealed that Arch Lending will provide the remaining $25 million in funding, so the total investment of these two institutions has reached $525 million. Does this mean that the other investors are just in name only and not contributing money?

From this point of view, Praxis may be another capital manipulation game of GEM Digital.