Harry Potter V. The Internet

It's a kind of magic
It's a kind of magic
Stuart Richardson

"The boy who lived" turns 20 years old today. Harry Potter, the turn-of-the-century literary sensation, topped bestseller lists and broke box office records across the globe, featuring seven book installments and their eight celluloid versions, and redefining the fantasy genre for a generation.

Readers in some 68 languages — including Ancient Greek, Latin, and Urdu — have explored Potter's magical world since the first 500 copies of the Sorcerer's Stone (or Philosopher's Stone in the United Kingdom) first appeared in bookstores on June 26, 1997. In Germany and France, the series was the first in English to top national bestsellers' lists. And in far-flung areas of the globe, parents began to name their babies after Harry and his friends. (In fact, the Mexican state of Sonora banned the name Hermione in an effort to prevent bullying.)

The internet has further accelerated the same globalizing trend that once vaulted Harry Potter into our lives.

The woman behind it all, author J.K. Rowling, continues to explore the fantastic world of Harry Potter on her website Pottermore. But since finishing the Potter series in 2007, the 51-year-old has shifted much of her energy toward online political and social commentary. In the past year alone, the author has shared her thoughts on Brexit, U.S. President Donald Trump, and terrorism with her 10.8 million followers on Twitter.

The leap from her timeless fantasy world to real-time current events commentary is a phenomenon in itself. Her cursory, witty jabs at the political establishment in both her native Britain and the United States are reminiscent of Mark Twain and Jonathan Swift's political satires penned generations ago. Yet her voice carries further and faster than Twain's or Swift's ever could. The internet has further accelerated the same globalizing trend that once vaulted Harry Potter into our lives.

But even if Rowling's tweets have made a splash, they may be the ultimate proof that any one thing that happens online can never match the power of a 400-page book or two-hour movie. After all, the commentators who wonder how a reality show star made it to the White House could just as well question the role of a fantasy writer leading the conversation on terrorism and geopolitics.

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

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 but the simplest of errors exposed the scam and limited the damage to investors.

Sky is the crypto limit

Laurence Boisseau

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.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

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".

Finding culprits 

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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