Geopolitics

Take 5 Venezuela: Prisoner Wives, Cheap Gas, Maduro On Maradona

Take 5 Venezuela: Prisoner Wives, Cheap Gas, Maduro On Maradona
Aurore Barlier and Pierre Labainville

We shine the spotlight this week on Venezuela:

PRISONER POLITICS

Plenty of glowing foreign press coverage of the arrival in Caracas of former Spanish Prime Minister Felipe Gonzalez, who came to support opposition leaders who've been jailed by the government of President Nicolás Maduro. But El Correo del Orinoco, a state-owned daily, wrote that the vast majority of Venezuelan people "rejected the presence of the former Spanish prime minister in the country," and criticized his interference in internal affairs. Gonzalez's visit is part of a growing movement to challenge the government's policy of jailing political opponents, with Italian daily La Stampa reporting on a group of wives of imprisoned government opponents who call themselves the "Women In White." The group has also denounced the lamentable economic situation of the country and demanded transparent presidential elections.

SAVE THE CONDOMS

The Center for Biological Diversity has sent 12,000 unusually packaged condoms to Venezuela. The women's monthly Cosmopolitan writes that the condoms feature endangered species pictures on their packaging, as a way to raise awareness of nature conservation while responding to a well-publicized shortage of condoms the country has been experiencing. Last February, the media reported that Venezuela was running out of condoms which had led to skyrocketing prices and raised serious health concerns.

​CHEAP AND EMPTY

Venezuela is a new favorite destination of young people who do not want to go broke on their holidays. But although you can buy a beer for a few pennies and find a decent hotel for $5 a night, Reuters says that last year's approximately one million tourists is four times fewer than in Colombia for example. In people's mind, Venezuela remains a place of crime and frequent shortages.



GAS GUZZLING

In Caracas, gasoline for your car is actually cheaper than water: $0.015 per liter ($0.26 per gallon). Prices are even 40 times lower on the black market. With such low prices, Venezuela’s carbon footprint is South America's biggest, and is an opportunity for bootleggers who sell the gasoline in neighboring Colombia. According to the Venezuelan newspaper La Calle, the government is considering raising prices, which surprisingly is supported by 59% of the population, according to a recent poll.

Photo: Sdi-jr/GFDL​

MADURO ON FIFA

After the recent soccer scandals that forced FIFA chief Sepp Blatter to resign, Venezuelan President Nicolas Maduro has made clear his preferred candidate is a certain No. 10 from Argentina. “(Diego) Maradona should become president of FIFA," Maduro declared. "He has been denouncing FIFA’s abuses for years and all he’s got in response were threats and ridicule.” Maduro's predecessor, Hugo Chavez, was a close friend of Maradona.

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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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