Geopolitics

Inside The Power Struggle In Pyongyang

North Korea's young new leader Kim Jong-un was believed to rely on the counsel of top general Ri Yong-ho, 69, who was suddenly removed Monday for "health" problems. Few believe that line, and see his departure as a sign of a maj

Ri Yong-ho (left), out as North Korea's top military chief, and key advisor to Kim Jong-un (right) (IBTimesUK)
Ri Yong-ho (left), out as North Korea's top military chief, and key advisor to Kim Jong-un (right) (IBTimesUK)
Daniel-Dylan Böhmer

As Kim Jong-il's funeral procession moved through the streets of Pyongyang on December 28 2011, it snowed – a sign that the sky was crying in grief, according to the North Korean propaganda machine. The snowflakes were nature's unwitting contribution to a carefully choreographed ceremony in the North Korean capital, a ceremony designed to pass the message that while the flame of the "Dear Leader" had gone out, the cosmos of his isolated dictatorship remained intact.

Eight men walked beside the limousine bearing Kim's coffin: four generals on one side, and four Party leaders on the other. Leading the politicians was chubby Kim Jong-un, 28, the son of the deceased who for years had been his designated successor.

At the head of the generals in uniforms on the other side of the hearse: Ri Yong-ho, 69, Chief of the General Staff of the Korean People's Army. As usual, his face wore an expression of patient suffering. The dead dictator had built him up to his current high level as he groomed his son as heir to the throne -- Ri was clearly meant to function as a mentor to young Kim, and provide a link to the army.

Flash-forward seven months: the cosmos of North Korea's dictatorship is undergoing major changes -- and Ri Yong-ho has been dismissed.

According to K.C.N.A., the state-run news agency, Ri's health problems were the reason cited by the Politburo of the Workers' Party of Korea (WPK) for the decision to relieve Ri of all of his Party duties. However, during recent public appearances, Ri had appeared to be in good health, and in any case health in a country with a chronically over-aged elite has never before been a reason for relinquishing power.

Some Korea-watchers think the real explanation behind Ri's removal lies in a power struggle between the country's civil and military leaders. One such observer is Park Hyeong-jung, a researcher at the Korea Institute of National Unification in Seoul. The South Korean caught on early to signs of conflict.

"In April, at the fourth Party conference followed by a gathering of the Supreme People's Assembly, there were some interesting appointments that clearly showed that the Party and the political security apparatus were tightening their grip on the military," says Park.

The most significant of these appointments, according to Park, was that of Choe Ryong-hae, a politician close to Kim Jong-un's uncle Jang Song-thaek. He received several promotions -- among them to Vice Marshall and Vice-Chairman of the Central Military Commission. "That a civilian would fill this function is totally out of the ordinary," says Park.

The appointments were an insult to Ri, Park says, because the sum of his functions made Choe – not Ri -- the number one man in the Party. "It's entirely possible that Ri didn't accept this de facto demotion, and so he had to go."

Chinese model

But staffing issues are also down to money, Park says: "The army has been having supply problems for years. This year it appropriated much more food than usual from farmers. But that move went against the plans of the new elite around Kim Jong-un and his uncle Jang Song-thaek."

Jang particularly wants to change the economy and establish clearer areas of responsibility, based on the Chinese model. However, "this is not about genuine reform" in Park's opinion. "The new leadership clique just wants to bring more foreign currency into the country, and that is more likely to benefit them than the people."

Some in the West were hoping that the recent pop concert with dancers in Mickey Mouse costumes, to which Kim Jong-un attended, was somehow a sign of a "North Korean Spring." This week's moves, Park says, appear to bury that hope.

"Politically speaking, this move is not reform-minded – on the contrary. Its goal appears to be even stronger political control through the Party and the security services."

Park says the Disney-inspired concert was more likely due to the fact that North Korean state media have to try and keep up with the South Korean and Chinese productions that are increasingly filtering into the country.

He says there is no real opposition to the military and Party in North Korea.

Furthermore, says Scott Snyder, director of the Center for U.S.-Korea Policy at the Council on Foreign Relations, there are no signs of a power struggle between the military and the Party. "The two pillars of the system are far too closely interwoven for them to work against each other in any widespread way," he says. "The most plausible conclusion to be drawn from Ri's fall is mainly that Kim's uncle Jang has managed to increase his own influence."

Snyder says the latest developments could impact North Korea's relationship with China. "It's known that Beijing feels comfortable having Jang among the top leaders," he says. "China has been looking for ways to exercise its influence in North Korea, particularly to keep the nuclear issue in check."

Kim had agreed to a moratorium on the North Korean nuclear weapons program in exchange for US aid, then promptly nullified the deal by testing a long-range rocket. Snyder doesn't believe that the U.S. will pick up where things left off, however. Right now, he says, the presidential elections are the main issue, and a new administration first has to establish its priorities in terms of foreign policy. Until all that's done, he quips: "Washington is as unpredictable as Pyongyang."

Read the original article in German

Photo - IBTimesUK

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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 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.

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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