The first well-known person who dared buy an island was the shipping magnate Aristotle Onassis, with his famous Skorpios, in the emerald waters of the Ionian Sea off the Greek coast. Then there was Marlon Brando, who made a new life on Te’tiarao after being captivated by French Polynesia.
Until recently, only the bulging bank accounts of famous multi-millionaires could secure access to the privacy of an island. But that is changing, and now there is an international market that allows regular people to buy and rent private islands around the world.
Today you can buy a a piece of island property for no more than an average used car, or rent a paradise island in the Bahamas for $2,000 per week.
“Due to recent technological changes like the Internet, it is much easier to search for and see pictures of the islands," explains Andrew Welsh, the director of Operations at Private Island, Inc. "Because celebrities like to own islands, in the past couple of years there has been an increased interest from regular people who want to try a different lifestyle.”
Welsh's agency is one of the leaders in the new market, currently with some 500 islands for sale and 250 destinations for rent in locations all around the world -- with the exception of Antarctica. The catalogue ranges from a small island, barely 3 hectares in area, in New Brunswick, Canada for sale for $30,000 to the island of Patroklos, 260 hectares off the coast of Athens, with land suitable for agriculture, with asking price of 150 million euros.
“We have clients from all walks of life, members of royal families and celebrities as well as regular people who have decided to make their dreams an island reality,” Welsh explained.
A teacher and an heiress
Cut yourself off from the world, enjoy nature, spend time with your family, have an adventure. All of those reasons are enough to try out the strange world of islands. Artists, business people and multimillionaires do it, but so do middle-class professionals who are fed up with with the noise and stress of cities.
Chris Krolow, the agency’s executive president, says Private Island Inc. recently sold a Canadian teacher an island in Ontario with a small house for $250,000. On the other extreme is Lilliane Bettencourt: The richest women in France and heir to the L’Oréal fortune sold her private island in the Seychelles for $74 million last summer.
The market is large, but it is also concentrated in places with good access and infrastructure. “The most popular islands are in the Caribbean, especially the Bahamas. They are beautiful, people speak English and they have a currency that is equal to the dollar," Welsh said. "It's also just a short plane ride from the United States.”
The other big market in the region is rentals. They go from from $2,000 per week for a 4 hectare island in the Gulf of Mexico to $30,000 per week for an island three times as large and with much more infrastructure in the Florida Keys. “
A high-quality island, specialists say, has to meet three criteria: A warm climate, a nice natural environment with easy transportation and a suitable residence. Of course, there can also be unpleasant surprises. Some of the cheap islands near Honduras and Belize are extremely humid, overrun with insects and are vulnerable to tropical diseases like dengue fever.
In addition, for many years islands in that area were frequently attacked by pirates. But that is also part of living on an island. “If you are worried about the dangers you might face, maybe a private island is not for you," Welsh explained. "Private islands are for people who are very independent and have an adventurous personality.”
It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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