Cumulative $1.6 Billion Investment Commitment Capital Game New Scam?

At a time when the crypto market is sluggish and venture capital institutions are slowing down their investment frequency, an emerging venture capital institution has attracted a lot of attention from the industry with its high-frequency investment speed and exaggerated investment amount. It is GEM Digital.

In the past six months, GEM Digital (and its related fund GEM Global Yield) has invested in at least 16 crypto projects, of which the single investment in Venice Swap, Naetion, KaJ Labs, Unizen, Unizen, H2O Securities and other projects exceeds 100 million U.S. dollars, with a cumulative committed investment of more than $1.6 billion, which is likely more than any other crypto VC.

List of crypto projects invested by GEM institutions this year

Just today, GEM Digital once again announced that it has signed a $35 million investment commitment with Travel Coin, a blockchain tourism ecological project. After the news was announced, the token price of the project rose by up to about 50%, but at the same time, the chain catcher reporter also found that the Token It has fallen linearly by more than 95% since its release, and the current total diluted market capitalization is still less than $5 million after today’s rise. Why is GEM Digital investing $35 million in such a market cap project?

This phenomenon does not exist in isolation. This is the case with multiple projects previously invested by GEM Digital. For example, on May 18, KaJ Labs announced that it had obtained a $400 million investment commitment from GEM Digital Limited, but the total diluted market value of the project Token LITHO was only $4.7 million. In addition, similar phenomena exist in projects such as Peculium and Energi.

At the same time, most of the projects invested by GEM Digital have low industry visibility, and there are no obvious bright spots in terms of business models. Moreover, almost all of GEM Digital’s investments are made independently, and they have never invested in cooperation with well-known venture capital institutions, and their behavior is quite strange.

So, is GEM Digital a fool with a lot of money? Why spend a lot of money on projects whose market value is much lower than the investment amount? The trick lies in the word “investment commitment”.

Compared with most financing news, investment institutions directly announce investment to the project party, and GEM Digital basically announces investment commitments in the news. Literally, an investment commitment means that the project party promises to invest a specific amount in the project party, but does not necessarily make actual investment. In an investment news from GEM Digital, the project owner stated that the investment is not a direct investment, but will be based on milestones and performance to ensure that the use of funds is fully optimized.

But according to an interview with the person in charge of an encrypted project, the so-called “investment commitment” has many jaw-dropping inside stories. The person in charge of the project said that GEM Digital had contacted the project by email and promised to invest 50 million US dollars, but when signing the investment contract, she found that the agency stated in the contract that it would not pay directly, but was selling Tokens. After the investment is released, the investment funds will be filled by the profits obtained.

That is to say, GEM Digital’s investment agreement is more like a cooperation smashing and sharing agreement. The two parties sign a so-called huge investment agreement to create good news in the market, and then collaborate to make a profit and share it. Judging from the Token performance of GEM Digital’s investment projects in the past, the situation is basically the same, and it is the users who ultimately pay for the investment.

According to Coinmarketcap data, the price of LITHO Token rose rapidly from about $0.008 to $0.016 after the announcement of the financing, but fell to about $0.0013 after 10 days. Other Tokens have similar K-line trends.

The trend of LITHO Token in the past 2 months, the investment time of GEM Digital is May 19

“This is actually using the media to manipulate the community,” said the aforementioned project leader. “I feel that the projects we work with will be miserable.” Most of GEM Digital’s investment news is published on Yahoo Finance, PR Newswire and other platforms , but it has also been reported by mainstream encryption media such as Coindesk and Cointelgraph. Because the actual insider is too weird and bizarre, it can be said that most of the encryption media industry has been kept in the dark.

For this method, GEM Digital is not actually its own original, but from its parent company Global Emerging Markets (hereinafter referred to as GEM), which is an alternative investment group worth 3.4 billion US dollars, and manages a series of global An investment vehicle for emerging markets, with more than 500 transactions completed in 72 countries, with offices in Paris, New York and the Bahamas.

Specifically, the company’s investment types include minority equity investment and control acquisition, involving many traditional fields such as environmental technology, pharmaceuticals, agriculture, energy, real estate development, etc., but the invested companies are not well-known, and many Chinese companies have also appeared. Names, including China Timber Resources Group Ltd (China Timber Resources Group), China PetroTech (Shenzhou Petroleum Technology), Heng Xin China Holdings Limited (Hengxin China Holdings), after searching these companies, there is very little information, among which Heng Xin China Holdings Limited (Hengxin China Holdings). Chip China was forcibly delisted many years ago.

Of course, GEM’s investment style is also generous. Most of the investments range from tens of millions of dollars to hundreds of millions of dollars. Its cumulative investment amount far exceeds the so-called 3.4 billion US dollars. At the same time, most investment news also appears “investment commitments” word.

In conclusion, GEM institutions are often willing to invest in projects with low visibility and flat business development, and mainly adopt the unconventional and low-threshold investment method of “investment commitment”, making use of their long-term momentum to create popularity, and need good news. The project parties reached a tacit understanding and conspiracy to jointly create a hidden and bizarre capital game, which requires the attention and vigilance of all parties in the encryption industry.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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