Accumulated $1.6 billion in investment commitments, a new scam in capital games?

Original title: " Behind the most "trench" encryption venture capital institution GEM Digital: a hidden and bizarre capital game "

Original author: Gu Yu & biscuit, chain catcher

Falling in the weak and windy crypto market When investment institutions have slowed down their investment frequency, a new 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 encryption projects, including Venice Swap, Naetion, KaJ Labs , Unizen, Unizen, H2O Securities and other projects have a single investment amount of more than 100 million U.S. dollars, and the cumulative committed investment amount exceeds 1.6 billion U.S. dollars, which is likely to exceed any other crypto venture capital institution.

List of encryption projects invested by GEM institutions this year

Just today, GEM Digital once again announced that it has signed an investment commitment worth 35 million US dollars with the blockchain tourism ecological project Travel Coin. It was also found that the Token has fallen linearly by more than 95% since its issuance, and the current diluted total market value is still less than $5 million after today's rise. Why would GEM Digital invest $35 million in a project of such market value?

This phenomenon does not exist in isolation. This has been the case for several projects invested by GEM Digital before. For example, on May 18, KaJ Labs announced that it had received an investment commitment of US$400 million from GEM Digital Limited, but the total market value of the project’s Token LITHO dilution was only US$4.7 million. In addition, projects such as Peculium and Energi have a similar phenomenon.

At the same time, most of the projects invested by GEM Digital are not well-known in the industry, and there are no obvious bright spots in terms of business models. Moreover, almost all of GEM Digital's investments are made independently, and it has never invested in cooperation with well-known venture capital institutions, and its behavior style is quite strange.

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

Compared to most financing news, investment institutions directly announce investment to the project side, GEM Digital basically announces investment commitments in the news. Literally, an investment commitment means that the project party promises to invest a certain amount in the project party, but it does not necessarily make the actual contribution. In a GEM Digital investment news, the project party 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 encryption 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 via 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 directly pay the money, but sold the Token After the payment, the investment funds will be filled by the profits obtained.

In other words, GEM Digital’s investment agreement is more like a cooperation deal and sharing agreement. The two parties signed a so-called huge investment agreement to create good news for the market , and then cooperate to smash the market to make a profit and share it. Judging from the Token performance of GEM Digital’s past investment projects, the situation is basically the same. It is the users who ultimately pay for the investment funds.

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

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

"This is actually using the media to manipulate the community," said the person in charge of the aforementioned project party, "I feel that the projects I work with them will be miserable." Investment in GEM Digital Most of the 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 inside story is too weird and bizarre, it can be said that most of the encryption media world has been kept in the dark.

For such a method, GEM Digital is not actually original, but from its parent company Global Emerging Markets (hereinafter referred to as GEM). A $3.4 billion alternative investment group that manages a portfolio of investment vehicles focused on emerging markets globally and has completed more than 500 transactions 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, and real estate development , but the invested companies are not well-known, and the names of many Chinese companies also appeared, including China Timber Resources Group Ltd (China Timber Resources Group), China PetroTech (Shenzhou Petroleum Technology), Heng Xin China Holdings Limited (Hengxin China Holdings), there is very little information on these companies after searching, and Hengxin China has been forcibly delisted many years ago.

Of course, GEM’s investment style is equally generous. Most of the investments range from tens of millions to hundreds of millions of dollars. At the same time, the word "investment commitment" appears in most investment news.

In summary, GEM institutions are often willing to invest in low-profile , and projects with mediocre business development, and mainly adopt the unconventional and low-threshold investment method of "investment commitment", use the popularity created by oneself for a long time, and reach a tacit cooperation with project parties that need good news, and jointly create a field of concealment And the bizarre capital game requires the attention and vigilance of all parties in the encryption industry.

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