USD Coin Claims It Will Help Venezuela, But What’s the Truth?

I’ll be the first to admit that when Jeremy Allaire of Circle announced that, “with US government permission” USD Coin, Circle’s stablecoin, would be working in cooperation with the Gauido government-in-exile my jaw nearly fell right off.

But the truth isn’t so transparent, as typically is the case in not only the cryptocurrency world, but finance and government, as well. Let’s do this.

The Scheme

If you’re wondering what use USDC may be to Venezuelans, well… so am I. But I’m wondering because this is literally how the cashflow sequence is explained in the announcement:

Money seized from the Maduro government will be placed in a US bank account for Gauido -> Next, that money is used to mint USDC tokens -> After that, the tokens are sent to Airtm wallets, where they are then converted into Airtm “stablecoins” -> after this, healthcare workers, can supposedly access these Airtm tokens and cash out at local ATMs.

This is USDC’s own description of the process.

Do you see a couple extra, unnecessary steps there? Doesn’t take a genius, right?

There are two obviously unnecessary steps:

1. USDC never needs to be used.
2. Airtm stablecoins never need to be used.

So… what the f*ck?

Unexplainable

It’s hard to explain this away, because not only do Venezuelans want US dollars (not USDC), so sending the dollars themselves would be fine, but now we’re adding two layers of trust and two layers of transaction fees.

It actually seems like this may be the least efficient way to move dollars/bolivars to Venezuelan relief workers.

And I can’t understand why the government would choose to do things this way. Either they’re incredibly incompetent and did little-to-no due diligence on this plan, or, perhaps, the government has too much going on to care. Possibly, this could be some grift.

But I don’t only say this because of the strange unnecessary nature of it, I say it because I took some time to look into Airtm, and I was not pleased with what I discovered.

What Is Airtm?

Airtm is kinda like PayPal, I guess, but a lot more wonky and with a lot less users.

The first thing I did was visit their website to find out what I could about them. There was little available.

They’re registered with FinCEN at a quaint little home in Mill Valley (red flag #1):

This look like a money services business to you?

There is no way to get fast, reliable support, and support appears to strictly be in Spanish. There’s no contact number, no employees named or listed, and the site that lists current market rates for currencies and cryptocurrencies is hardly usable (red flag #2).

We’re not done yet. Apparently, Airtm was already being used to facilitate payments to healthcare workers, and the only issue? It didn’t work (red flag #3):

This is taken from a CoinDesk article, available here.

No worries though, right? Let’s just keep going.

So, why would Airtm be chosen? How about the people who invested in this platform, one being Coinbase themselves! (red flag #4)

Okay, fine. Whatever.

After hunting for awhile for any real address where Airtm might be located, I arrived at a location in the heart of Mexico City. Unfortunately, this location is also claimed by a Mexican architecture firm (red flag #5).

That’s Only Airtm, What Else?

For starters, none of this will in anyway make it more difficult to trace these funds and/or block access to them by the Maduro regime — in fact, having all of this viewable on a highly regulated blockchain infrastructure may make it even more difficult for Gauido, and therefore frontline relief workers, to ever access these funds at all.

None of this, on any level makes sense. But here we are.

Who Cares?

I do, and hopefully some of you do, too. Why? Because either this points to extreme government negligence, wherein government agencies should be held responsible along with the corporate entities pushing grift, or it points to a stranger, more convoluted story that has yet to be unearthed.

Stay skeptical, friends.