Original title: GEM Digital plays the capital manipulation game again? Praxis received a commitment of over $500 million in financing, but the funds have not yet arrived
Original author: Nancy, PANews
As leaders such as Vitalik and Balaji push for the network nation, more and more builders are joining in and opening up the growth space for this narrative. Recently, Praxis, which claims to be the worlds first network nation project, announced that it had received up to $525 million in financing, which attracted much attention. However, at the same time, the previous investment scandal of GEM Digital, a participating investor, also cast a question mark on this huge amount of financing.
Announced again that it has received more than US$500 million in financing to build a cutting-edge technology city
On October 16, Praxis announced that it had received $525 million in financing, which will be used to speed up and improve transactions with governments and landowners to build a technology-forward city.
Investors in this round include Arch Lending, GEM Digital, Manifold Trading, as well as Farcaster CEO Dan Romero, Dragonfly partners 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 also received a $4.2 million seed round of financing in 2021, the year it was founded, with the participation of Bedrock Capital, Winklevoss Capita and Alumni Ventures, and completed a $15 million Series A financing in 2022 with investments from Paradigm, Alameda, Three Arrows Capital and Robot Ventures.
Praxis was founded in 2021 and is led by 28-year-old co-founder Dryden Brown. According to the official website, Praxis is an Internet-native alliance that aims to accelerate technological progress and revitalize Western civilization. It has more than 14,000 Praxians in 84 countries, and the companies founded by these members are worth more than $400 billion.
One of Praxis’ core goals is to build a completely new city for three reasons: (1) Unleashing technological and scientific potential: by building cities in talent-intensive acceleration zones, regulatory barriers are reduced, thereby promoting 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) Showing the world what is possible in the 21st century by building great cities.
According to the Wall Street Journal, Praxis has not yet determined the specific city site. Latin America and the Mediterranean region may be selected, and the final decision will be made in the first quarter of 2025. Dryden Brown revealed that the project is initially planned to cover about 1,000 acres of land and accommodate 10,000 people.
In addition, Zaha Hadid Architects has provided Praxis with a conceptual plan for urban construction that combines 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 is the main financing party and has repeatedly used false financing information to defraud
Although the concept of a cyber nation is gaining popularity, Praxiss large investment is surprising, and the participation of GEM Digital also makes the investment questionable.
Seeing BlackRock and other institutions committed to cryptocurrencies, we designed a crypto-native mechanism to use tokenized real-world assets (RWA) to finance large projects and worked with Global Emerging Markets, the largest new urban development project in the Middle East. This financing is also the first application of this withdrawal mechanism. Praxis said in a financing statement. This financing mechanism usually means that the borrower can gradually withdraw funds over a specific period of time based on project progress or needs, rather than receiving all the 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 funds. In return, Praxis needs to provide GEM with tokens representing the ownership of future real estate development, that is, only Praxis can get this money after the token is launched. The remaining funds will also be distributed in stages according to milestone events, such as obtaining local government permits, purchasing construction land, tokenizing land ownership, and starting construction.
In fact, this performance-based investment is a common method used by GEM Digital. According to previous reports by PANews and Chain Catcher, investment commitment is a common trick of GEM. Dozens of unknown crypto projects have announced financing news in the form of investment commitments, but in fact GEM has signed so-called huge investment agreements with junk projects, creating market good news to deceive the media, and jointly smashing the market to make profits and share them. There are even crypto projects that have disclosed that GEM Digitals investment funds will not be paid directly, but will be supplemented by profits after selling tokens.
In addition, the Wall Street Journal also reported that Arch Lending will provide the remaining $25 million in funds, so the total investment of these two institutions has reached $525 million. Does this mean that the remaining investors are just figureheads and have no investment?
From this point of view, Praxis may be another capital manipulation game of GEM Digital.
