Sources

Reading Tea Leaves In Pyongyang

Kim across the table from U.S. Secretary of State Mike Pompeo in Pyongyang.
Kim across the table from U.S. Secretary of State Mike Pompeo in Pyongyang.

WASHINGTON — When Kim Jong-un came out in the open, analysts, spies and all kind of experts were running through the footage, sound bites, testimonies, intelligence reports and open-source information collected during the few hours the North Korean dictator visited South Korea, Pyongyang's staunch enemy since 1953. Since that year, not a single member of the Kim family had ever set foot in the South.

As a matter of fact, Kim's crossing of the border two weeks ago doesn't count as a state visit, since he only took a few steps into enemy territory. But those few steps were enough to get Kim out of his comfort zone, to put him into a situation that he could not control completely, forced out of his emperor clothes and postures, unclad. In this sense, Kim's crossing of the border stands in strong contrast to the declaratory visits to Beijing last month and a week ago to Dalian, where he met with Xi Jinping, the Chinese red emperor. On both occasions, the Chinese protocol was designed to please Kim by creating an atmosphere and decor that were suitable for North Korean purposes. The footage of the formal meeting between Kim and Xi, showing the two parties' symbols, military salutes, and ornate liturgical celebrations, broadcast only on North Korean state TV.

In short, stepping on South Korean soil, Kim exposed his other side, a side that North Koreans and the world had never seen before. Kim Jong-un almost looked like a human instead of a dictatorial icon. Western observers, in addition to the press corps of 3,000, have rejoiced at the opportunity to scrutinize the young leader in person for the first time. The recent events are somehow reminiscent of Hal Ashby's movie Being There, when a middle-aged gardener, Chance (Peter Sellers), leaves his house for the first time in his life. Chance wanders aimlessly through the busy capital city dressed in conservative, old-fashioned business attire, a homburg hat, suitcase, umbrella and a television remote, giving the impression of an expensively well-dressed man of means. After a car accident, a rich and influential mogul, Ben Rand, assumes that Chance is an upper class, well-to-do, highly-educated man and decides to take him under his wing. Because Rand is deeply involved in the political world and is a close adviser to the President of the U.S., the secret service and FBI investigate Chance's identity, marked by simplistic, serious-sounding utterances which mostly concern the garden, and are interpreted by virtually everyone as allegorical statements of deep wisdom and knowledge regarding business matters and the current state of the economy in America.

So when Kim Jong-un sat down for an hour-long televised conversation with South Korean President Moon Jae-in, the cameras were all on him. They almost never showed the face of the poised, much more experienced Moon, old enough to be Kim's father, who calmly sipped his tea as the cameras focused on a wildly gesturing, jittery young Kim (did he badly miss his cigarette?), who sweated intensely, stuttered occasionally, but never touched the offered tea. Kim was under intense scrutiny, yet none of the foreign agents could get close enough to take a sample of the fabric of his cloth in order to analyze its origin and craftsmanship, as happened in one of the best scenes in the Sellers movie. Some of the South Korean observers did, however, take a closer look at Kim's shoes. But even they did not get close enough, and Kim did not leave a trace behind.

Why is he doing this?

There is another, much more favorable image of the young dictator, a narrative that tends to obliterate the fact that Kim killed his way to the top by ordering the assassinations of a powerful uncle and a half-brother, among others. He is no longer seen as the porky princeling, as the New Yorker reported: "‘Before, he had a notorious image," Moon Chung-in, a Presidential adviser on inter-Korean affairs said. ‘He had been seen as a demon, evil, impulsive, irrational. That was not the case at the banquet. He was quite rational, reasonable, accommodating, and accessible." President Moon later described Kim to aides as ‘frank, open-minded, and courteous." The North Korean never invoked the superiority of a nuclear power—which he is, and Moon is not."

So, who is Kim, why is he doing this, why is he willing to show us a side even his countrymen are not familiar with? I've tried to understand the motives behind the young leader's radical change in behavior. Among the experts, there seems to be a prevailing judgment that Kim Jong-un opened the path to dialogue after North Korea achieved complete construction of its ICBM, powerful enough leverage to bring the Americans to the negotiating table.

Of course, in the complicated and paranoid mind of North Koreans, nothing is linear. As harsh economic sanctions started to have a serious effect on the national economy, Kim decided to put his missiles to the side for a while, flashing smiles left and right, trying to bargain business deals with South Korea, China, and America. They should improve the daily life of the local population, who in return will be ready to extend credit to the regime. The fact that China, the U.S., and South Korea are seeking to tame North Korea separately and for completely different reasons enables Kim to play them against each other; hidden behind the veil of political correctness and a declared common interest in defusing the nuclear danger on the Korean peninsula, the aims of three countries currently engaged in dialogue with Pyongyang are disparate.

The end-game will ultimately depend on the capacity of the negotiators around the different tables. Some of the principal indications of the parties involved: North Korea will not give away its nuclear weapons, ever; South Korea, the shrewdest negotiator in this game, aims for economic integration and unification, similar to Germany in 1990's, but doesn't have the economic power to finance the expensive and multilateral unification process.

China, as mentioned before, opposes the integration of the peninsula because it plays against its hegemonic aspirations in the region. A strong, unified economic, nationalist Korea is a much bigger obstacle than American aircraft carriers in the region. As I wrote some time ago, China is interested in leading Pyongyang toward the gradual and controlled process of economic development, a soft transformation of the totalitarian regime into a more prosperous country without abandoning its socialist colors and phraseology. A view recently expressed by John Pomfret, in the Washington Post, describes Chinese efforts to expand further control over Pyongyang, keep Washington at a distance, and the peninsula separated.

With President Trump in the White House, we're left with an unpredictable element, the rogue U.S. The outcome of the meeting between Trump and Kim in Singapore on June 12 is impossible to predict. In a recent, extensive interview for the NKNews.org, Dr. Sue Mi Terry, a former senior analyst on Korean issues at the Central Intelligence Agency (CIA) and now a senior fellow at the Center of Strategic and International Studies (CSIS), explains in detail the difficulties of collecting intelligence information or running informants on North Korean ground. The country is still closed and almost sealed to outside sources, which makes recruiting of the informants almost impossible. Even the Cold War Soviet Union was a much more fertile ground to work on, says Mi Terry, who then explains how much the intelligence on North Korea must rely on the second and open sources.

Fact checking and daily analysis are fundamental when you live in quicksand. When it comes to the American president, Mi Terry says in the podcast, various intelligence agencies collect carefully selected, analyzed, and edited information. The president gets this report in daily written briefs. But he does not read them. So all the carefully-prepared nuances in the briefs are lost. The intelligence agencies prepared a kind of handbook that should enable the president to enter the negotiating room better prepared. Mi Terry says that President Trump will not even open the book, never mind read it. He will rely on his gut when he sits down with Kim, and then who knows what might happen.

In fact, last week ago, Axios.com published an insider on how it Trump's negotiation looks behind closed doors:

Trump likes to walk into a meeting with a head of state and throw out the protocol, which he believes throws rivals off balance.

Trump operates almost purely on gut instinct. "He never wanted to be briefed all that much before these foreign leader meetings," a former senior administration official said. "He was annoyed when former national security adviser H.R. McMaster would come in and say here's what we need to do and give him note cards and all the information."

"Trump lives by improvisation," said another source who has seen Trump at close quarters in foreign leader meetings. "He believes he doesn't need to prepare, that he performs best when he flies by the seat of his pants and stays flexible. He believes this approach has always worked for him in business and so far at least, politics."

Trump will get awkwardly tough with leaders after showering them with praise in public only hours earlier.

That happened in his recent meeting with Japanese leader Shinzo Abe. Trump took him to task on trade and was very aggressive, said a source with direct knowledge of the meeting.

"He just has no aversion to awkwardness," said another source who has sat with Trump in meetings with foreign leaders. "Most people, even if they wanted to make a point, they'd do it in a way that the other person isn't flailing out there."

So (assuming the summit actually happens) what will happen in Singapore on June 12 is impossible to predict. But there is no doubt that the White House's interpretation of the meeting will be similar to the most recent one when President Trump woke up half of the nation so it could watch him receiving three Americans released by the North Korean regime. There is not much information on why the three naturalized Koreans were held prisoner, indicating opaque reasons. So when it comes to the meeting, I advise watching the North Korean footage. Even if you do not understand the language, it might be a better indication of the meaning of this historical summit than the monosyllabic phrases sure to come from Trump.

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Economy

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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