Energi did not look good in the picture of events linked to the alleged 50M investment deal by GEM Digital Limited.
I believe there was a failure to protect the organization and its investors.
Energi could and should have done their homework.
The alleged deal was reported on May 20, 2022 on Yahoo Finance.
Between the 20th and the 22nd of May there was an increase in the price of NRG of almost 100%.
One week later the price was at the previous levels and two weeks later it was below the May 20th levels.
I believe the situation should be explained in detail and investors updated on the alleged legal process that Energi has taken against GEM Digital Limited.
Anyway, for those who are interested, I found this article that seeks to explain the, to say the least, dubious way of acting by GEM Digital Limited:
"
Behind the VC high roller GEM Digital: an absurd secrete capital game
Author: Hu Tao and @BlockCookies , ChainCatcher
With a committed investment of more than $1.6 billion in half a year, GEM Digital is the most “extraordinary” crypto venture capital institution, but there are many unknown but rather bizarre inside stories behind it.
Amid the weakened crypto market, VC institutions have rolled out strategies to slow down investment frequency, with one exception called GEM Digital. The latter one, an emerging VC institution, has gained much attention in the industry from its high frequency of investment and staggering investment volume.
In the past half year, GEM Digital (with its related fund called GEM Global Yield) has invested in at least 16 crypto projects, with over $100 million single investment each in Venice Swap, Naetion, KaJ Labs, Unizen, Unizen, and H2O Securities, and committed investment funds over $160 million, which may exceed any other crypto VC institution.
On July 18, GEM Digital announced again that it would sign with the blockchain tourism ecological project Travel Coin on an investment commitment reaching $35 million. After the announcement, the price of the project token has raised by as much as about 50%. But the ChainCatcher reporter found that its token has dived linearly over 95% with its current fully diluted valuation (FDV) less than $5 million even after the rising on its announcement day. So why would GEM Digital invest $3.5 million in this project with such a valuation?
The situation is not unique. GEM Digital has invested in many such projects. For example, on May 18th, KaJ Labs announced its secured investment commitment of $400 million from GEM Digital Limited, whose project token LITHO only registered an FDV of $4.7 million. The same situation happened to Peculium and Energi.
At the same time, most of the investment projects of GEM Digital are less well-known and have few highlights in the business module. Also, almost all of the investments from GEM Digital come alone without any cooperation with famous VC institutions. These things all point to its weird manner.
So GEM Digital is willing to be taken for a ride? Why would it spend so much amount in projects whose market value is far less than the investment amount? We can have a glimpse of its monkey business from the wording“Investment Commitment”.
In most of the other funding news, the investment institution directly announces its investment to the project party, but GEM digital normally announces its investment commitment. From the wording, investment commitment means that the project party commits another project party that it will invest a certain amount of funds, which may not be delivered in effect. In one funding news of GEM Digital, the project party says the investment is not a direct one, but rather it depends on the milestones and performance to ensure that funds can be used carefully.
But according to the ChainCatcher interview with one project owner, the so-called“investment commitment” has many mind-blowing insider information. The project owner says that GEM Digital once contacted them by email, and promised to invest $50 million. But during the contract signing, she found that the institution would not directly give them funds, but instead they would fill up the investment with the profits gained from token selling.
That means, the investment agreement of GEM Digital is more like a cooperated market smashing and profit-sharing agreement, where two parties sign the high-value investment agreement, spread news signalling a promising market, and then smash the market together to gain profits. Its previous invested tokens all show the same performance, where users have to pay for it at the end of the day.
According to Coinmarketcap data, after the funding announcement of LITHO token, its price skyrocketed to $0.0016 from about $0.008, but 10 days later it dumped to about $0.0013. Other tokens also have the same performance in candlestick chart.
The project owner mentioned before said, “This is using media to manipulate the community. I feel like we would be doomed if we cooperate with them.”Most of the funding news of GEM Digital was published on platforms such as Yahoo Finance and PR Newswire, and also reported by mainstream crypto media such as Coindesk and Cointelegraph. Its weird and strange insider story fooled half of the crypto media circle.
This ploy is not original, and it comes from its parent company Global Emerging Markets (hereafter referred to as GEM). Its official documents show that GEM is a $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world. It has completed over 500 trades in 72 countries and set offices in Paris, New York, and Bahama. Specifically, the company’s investments include minority equity investments and control acquisitions in many traditional sectors such as environmental technology, pharmaceuticals, agriculture, energy, and real estate development, but none of the portfolio companies is well-known. These include China Timber Resources Group Ltd, China PetroTech, and Heng Xin China Holdings Limited, which are poorly documented after a search, with Heng Xin China having been compulsorily delisted many years ago.
GEM also shows a generous investment style with investments reaching tens of millions to hundreds of millions of dollars. Its investment has far surpassed its claimed $3.4 billion, with most of the time “investment commitment” occurring in news.
In summary, GEM and its sub-institutions prefer projects with plain business development and less fame, and mainly take the abnormal and low-entry-bar investment strategy of investment commitment. Based on its long made-up reputation, it conspires with projects wanting to send good news, to create this secret and absurd capital game, which raises alarm bells to all members of the crypto industry." -
https://chaincatcher.medium.com/behind-the-vc-high-roller-gem-digital-an-absurd-secrete-capital-game-6d365de6bd9fOf course I cannot verify all the information in the article. Do Your Own Research.
"
Energi Defense and its investigative arm, Energi Bureau of Investigations (EBI), serve to protect our community from hackers, scammers, and other bad actors in the space. Our elite team ranges from veterans of the Cybersecurity industry to veterans of the Intelligence Community (FBI, CIA, etc).
Those who seek to harm our community will be swiftly dealt with and referred to our law enforcement partners for prosecution in their respective jurisdiction. Energi is unique and forward-thinking in the cryptocurrency space as we provide this vital service to our community and has a Treasury system in place to vigorously support it and our community’s future growth." -
https://energi.world/energi-defense/May the lesson be useful in the future.