Akio, a Non-Fungible Token (NFT) project, falsely announced on September 24 that it had raised a $5 million seed round led by Pantera Capital. The announcement, made on the social media platform X, was quickly and publicly denied by Pantera partner Franklin Bi, highlighting an issue of projects making unsubstantiated claims to generate interest. The incident is a warning of the importance of background checks on statements claimed in social media, by crypto projects.
A Funding Claim Unravels
The incident began when Akio published a graphic on its X account detailing a supposed $5 million seed round with Pantera Capital as the lead investor, along with Nvidia Ventures, Hasbro Ventures, AMD Ventures, and other players.
Shortly after the post went live, Franklin Bi of Pantera Capital issued a direct denial on X, stating, “Pantera is not an investor in this.”
Beyond Pantera, none of the other companies shown in the Akio post, Nvidia Ventures, Hasbro Ventures, AMD Ventures, Net Ease Global, SBI GRoup, SIG DTI, Susquehanna International Group Company, have publicly acknowledged any investment in Akio or the publication.
Instead of issuing a correction, the Akio project reportedly blocked Franklin Bi on the platform following his refutation of their announcement.
Legit Information
The Akio incident offers a direct example of red flags and underscores that investors have to carefully review information, as well as the source of the announcement. Legitimate funding rounds are typically confirmed through official press releases or on the investors’ own channels, not just a social media graphic.
Investors can also verify claims with the alleged investors directly, such as: Pantera Capital’s official website reveals no mention of Akio in its portfolio. A lack of confirmation on a venture firm’s official blog, portfolio page, or social media can be a warning sign.
A Playbook for Investor Due Diligence
The Akio incident serves as a real-time case study in the red flags that can surround fundraising announcements. For investors, it places a spotlight on the importance of verifying claims before making financial decisions. Here are key steps for due diligence:
- Trust Official Channels: Legitimate funding rounds are almost always announced via official press releases or are featured on the venture capital firm’s own website, blog, or verified social media accounts. An unverified graphic on a project’s own social media is not sufficient proof.
- Verify the Portfolio: Check the investor’s official website. Pantera Capital’s online portfolio, for example, contains no mention of Akio. A project’s absence from its alleged backer’s portfolio is a significant red flag.
- Seek Cross-Confirmation: Look for reporting from reputable, independent crypto news outlets that have verified the round with the parties involved.
Why false claims threaten investor trust
False claims damage the reputation of the project making them and force venture capital firms to publicly defend their credibility. Also, it contributes to an erosion of trust across the industry. Furthermore, false hype can be used to temporarily inflate the price of tokens or NFTs, leaving uninformed buyers at a loss when the claims are proven false. The Akio-Pantera is a reminder that in a largely unregulated space, claims should be treated with skepticism.
Also read: X Exposes Crypto Scam Bribery Network Amid Rising Fraud
