Geopolitics

On Ukraine, There Is Just One Way To Handle Putin

Europe and the U.S. must respond to Russian President Vladimir Putin with neither war nor capitulation. There is a third option: total isolation.

Russian President Vldimir Putin in February 2014
Russian President Vldimir Putin in February 2014
Daniel Brössler

-Analysis-

BRUSSELS — Europe is accustomed to being pursued by ghosts from the past, but they are now finally catching up with her. When a world power sends troops into a neighboring country in response to a carefully orchestrated invitation, claiming to act in defense of the people, and seizes control of a region, alarm bells start to ring.

No, 2014 is not 1938, nor 1968. Crimea is not the Sudetenland, and Kiev is not Prague. However, Russian President Vladimir Putin has not only acted in breach of international law — he has also made it clear that his desire for power in the region of the former Soviet Union knows no limits.

After more than two decades, it looks as if the relative peace that has reigned in Europe since the fall of the Berlin Wall may be in danger. As we often hear Russian voices lament, the country is humiliated, its interests neglected; the West has played the victor and a latent Cold War mentality is to blame.

And yet, indeed, this argument only makes sense within the logic of the Cold War.

According to such logic, certain nations are not free to determine their own fate because they lie within Russia’s sphere of influence. Putin has described the fall of the Soviet Union as the greatest geostrategic catastrophe of the 20th century. Anyone who claims that the deeper motivation behind Russian aggression in Ukraine lies in the West’s supposed arrogance would do well to remember that.

The end of an illusion

The time has come for the West to stop laboring under the illusion that Russia — a country whose internal politics are marked by authoritarian rule, despotism, abuses of power, nationalism and mourning for an empire lost — can outwardly be a reliable partner for the European Union and the United States.

This illusion has persisted even after the war in Georgia in 2008, when former Georgian President Mikheil Saakashvili bore the brunt of the blame, and even while the West has looked on in disbelief as Russia has supplied Bashar al-Assad with arms throughout the conflict in Syria.

Now, however, the crisis in Crimea shows that internal and external politics in Russia cannot be separated. In both spheres, Putin respects only power, not justice.

The United States and Europe are faced with a difficult decision. The situation in Ukraine is threatening to develop into a war where the West will not intervene militarily. Although Ukraine’s territorial sovereignty is guaranteed on paper, for example in the Budapest Memorandum signed when Ukraine gave up its nuclear weapons in 1994, NATO cannot offer the country any assistance against nuclear Russia.

But for this reason, the West cannot afford to be passive right now. Moscow’s aggression must be stopped without resorting to military threats.

That will require a level of determination that Putin obviously believes is lacking in the West. Diplomatic relations with Russia must be completely severed. The only permissible negotiations should be those focused on finding a solution for the Crimean crisis. Summits like the planned G8 meeting in Sochi in June cannot take place. The aim is not to impress Putin — but to avoid all semblance of normality.

The Russian president’s assumption that the West will be outraged for a while but then settle down must be proven wrong. Otherwise there can be no guarantee that Putin’s eye will not turn to other countries in Eastern Europe and central Asia.

The difficult question of sanctions

This poses one of the most difficult questions to arise from the crisis: the question of sanctions. They have been the West’s weapon of choice when dealing with tyrannical rulers and have sometimes met with success. But Russia is a special case: a nuclear power, a member of the United Nations Security Council and a vital energy provider. Sanctions against Russia could prove very costly for the West.

If Russia were to cut off the gas supply to Europe, that could have devastating consequences for many countries — but first and foremost for Russia itself. The country’s economy is already struggling, its development stunted by corruption. If Putin does not come to his senses, the European Union must find the courage to put him and the oligarchs who support him under economic pressure.

In 2014, a century after the start of World War I, which would tear the continent apart, the European dream is once again in danger. Europe must face up to the ghosts from its past. It has no other choice.

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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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