A few weeks ago, Paris-based Air Next offered to raise funds in cryptocurrencies. The problem was that, in order to obtain approval from the Autorité des marchés financiers (AMF), which is optional, Air Next submitted a number of documents, some of which were forgeries. The regulator immediately alerted investors to the risk of fraud, which has now been confirmed. Here's what you need to know about this scam.
Fictitious director and identity theft
In February, Air Next registers its head office in Paris, declares a share capital of one billion euros, and registers with the Paris Commercial Court.
Air Next has announced that it wants to develop a blockchain-based application, enabling users tobuy train or plane tickets in cryptocurrencies. Fares will be highly competitive, and users will benefit from money-back guarantees in the event of delays or cancellations, thanks to "Smart Sontracts" - computer protocols based on blockchain technology.
During the summer, Air Next, officially managed by Philippe Vincent (whose identity has in fact been usurped), began recruiting. The company will hire a total of 35 employees, via LinkedIn ads and video-conference interviews. At this stage, none of them suspects that they have just been hired by a fictitious company. Some executives even resign from major American or French groups to join the ranks of Air Next.
" There were 35 of us in the company who believed in this project, 35 who believed that the company would revolutionize the market," a former Air Next employee told Cryptoast media. All the people recruited had " enviable professional situations and left important positions to join this adventure ".
The company's fictitious manager, Philippe Vincent, was officially a trader who earned substantial sums by investing just a few dollars in the early days of Bitcoin. The employees never met him: they were in contact with Julien Leclerc, the recruitment manager, to whom the manager delegated the structuring of the company.
In reality, the two men were one and the same, guilty of identity theft. Employees saw him every day, but only by videoconference, and the man used deep voice and deep face software to take on another appearance.
Typing error alerts Autorité des marchés financiers
Air Next then decided to obtain a visa from the French Financial Markets Authority (AMF) for its ICO (Initial Coin Offering), which would enable it to raise funds in exchange for digital tokens to be used in its store.
AMF approval is optional in France, but it does offer investors a number of guarantees. It is a label that is obtained by providing the regulator with a certain number of informative documents about the company and the token offering.
Problem: after studying the documents sent by Air Next, the AMF immediately suspected a number of them of being forgeries. Among the elements that aroused the AMF's suspicions was a typing error at the bottom of the bank certificate. Instead of the name "Edmond de Rothschild", it reads "Edemond". This gross error prompted the AMF to issue a press release on September 30, alerting potential investors to the risk of fraud.
Fearing, quite rightly, that the scam would be detected, Air Next decided a few hours before the AMF's press release was published to bring forward the token pre-sale date. But it was already too late: instead of the millions of euros the company had hoped for, it raised just 150,000 euros.
Other factors, such as the exorbitant amount of share capital, had already raised eyebrows among cryptoasset specialists. Why would a company with a share capital of €1 billion need to raise funds?
What's more, Air Next's whitepaper, which provides all the essential information on the project and the company, contained a number of inconsistencies. For example, the company's CEO is said to have made a fortune by investing in Bitcoin as early as December 2009, even though the very first sale only took place in October 2009 and, at the time, only a few people were familiar with the cryptocurrency.
Once the AMF had uncovered the scam, the notorious Julien Leclerc, far from giving up, sent a note to his employees, in which he suggested they open " a dedicated Telegram channel [...] and maybe set up this project as a Scop ", as revealed by the Cryptoast media.
Today, the investors and employees have lodged a complaint, and regret that the Paris Commercial Court did not detect the fraud earlier, even though the bank certificate containing the typing error had been sent to it before Air Next was registered with the Registre du Commerce et des Sociétés.
They also denounce the role of certain media and specialized influencers, who relayed Air Next's project without bothering to carry out further checks, thus helping to reinforce its credibility.