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Venezuelans are still waiting for $300,000 in promised cryptocurrency donations.EXPAND
Venezuelans are still waiting for $300,000 in promised cryptocurrency donations.

Venezuelans Desperate for $300,000 in Crypto Donations Must Continue to Wait

For Venezuelans enduring widespread food shortages and the daily desperation caused by hyperinflation, a months-long wait for hundreds of thousands of dollars in promised humanitarian aid just got a little longer.

The Air Drop Venezuela campaign began with the aim of giving a one-time donation of the equivalent of $10 in cryptocurrencies to as many as 100,000 Venezuelans. But officials with the campaign have told New Times they will delay a disbursement of funds originally scheduled for today, owing chiefly to technical limitations of their system. That marks the fifth delay in ten months.

The Air Drop campaign is managed by AirTM, a digital currency exchange that allows users to quickly swap Venezuelan bolivares for U.S. dollars and cryptocurrencies. So far, the Air Drop Venezuela campaign has drawn more than $300,000 in donations and 70,000 verified Venezuelan users.

Venezuela's ongoing economic crisis has caused a collapse of its health-care system, rampant food shortages, and skyrocketing crime that's given the country one of the world's highest murder rates. Given the reluctance of Venezuelan strongman Nicolás Maduro to formally declare a state of humanitarian crisis, many well-established international aid organizations have been unable to do their usual work on the ground — it wasn't until April that International Red Cross was allowed to enter the country to deliver aid. And what little humanitarian supplies from abroad actually make it to Venezuela must first go through the hands of government officials all too happy to take their own cut off the top. So with routine paths to humanitarian support blocked, cryptocurrencies have risen as an unlikely source of relief.

Multiple crypto-fueled efforts to help impoverished Venezuelans have sprouted, but AirTM's campaign is distinct in that it combines a for-profit corporation with a nonprofit humanitarian charity. AirTM itself makes money by charging a small transaction fee for deposits and withdrawals made on its app and, therefore, benefits from having as many Venezuelans as possible adopt the new technology. This is reflected in the Air Drop Venezuela campaign, which requires Venezuelans to download and register on AirTM to become eligible for the funds. The same can be said for the campaign's approach to vetting recipients, a process that simply requires any interested Venezuelans to provide a photo of themselves holding up a government-issued ID. There are no filters that would block wealthy Venezuelans or Maduro cronies from signing up for their one-time $10 donation.

Air Drop Venezuela began in November 2018 with an ambitious goal: $1 million in aid to be split among 100,000 recipients. That was the eventual target, at least. But there was always a plan to begin disbursing donations by the beginning of the new year. By the end of December, the campaign had 10,000 verified users and had drawn about $176,000 worth of various cryptocurrencies, including Bitcoin, Litecoin, and Ethereum, but campaign officials still decided to push distribution of donations back another month. Four other delays would follow: First, from the end of January to the end of February, then to the end of May, then to the beginning of August, and, most recently, to the end of this month. Even then, the latest disbursement deadline should come with an asterisk, because AirTM cofounder and executive chairman Tim Parsa says he can't fully guarantee when money will actually begin going out the door.

According to Parsa, AirTM was simply unprepared for the number of new users it received since launching the Air Drop campaign. As he tells it, sending funds without the appropriate technological upgrade would have led to slow, clunky experiences on the AirTM app. The delays until now have been caused by a platform-wide rebuild meant to accommodate not only hundreds of thousands but also millions of users.

"We were victims of our own success, and that's a great problem to have as a startup," Parsa says. To that point, he mentions he had similar issues with another startup he founded, which handles currency exchanges and conversions for users around the world. "From the beginning, our intention with this campaign was noble: to help Venezuelans. We couldn't predict this."

Though it might be true this is a problem common to startups, the stakes are different for AirTM, which has promised aid to tens of thousands of Venezuelans — real people, many of whom are desperate for relief. The optics of the delays have not been received well by some Venezuelans. 

"This latest delay by the Air Drop campaign isn't really a surprise. There isn't much expectation for the campaign left among us AirTM users, who, like me, feel deceived," says Auxman Mendoza, a 43-year-old technologist living in Caracas. "The crisis in Venezuela has worked to the benefit of many, both directly and indirectly."

Mendoza says he expects the funds will eventually make their way to users like himself, if only to avoid AirTM coming under fire. "The campaign, thinking cynically, might have been used to spread AirTM, as has certainly been the case." 

While AirTM prides itself on facilitating currency exchanges all over the world, Venezuela is far and away the company's biggest source of business. Nearly 75 percent of AirTM's 560,000-plus users worldwide are Venezuelan, according to AirTM cofounder and head of product Josh Kliot. The spike in users that led to delays in disbursement ultimately came from Venezuelans signing up after the campaign began. While delays in disbursement continued, Air Drop Venezuela received exposure in various big-name news outlets, including NPR, the Miami Herald, and Forbes.

"You don't have to be a detective to realize that part of this campaign is just a user-acquisition play. Clearly, they are attempting to help Venezuelans and help AirTM at the same time," says Joe Waltman, executive director of GiveCrypto.org, a nonprofit crypto campaign that gives direct cash transfers to other nonprofits working on the ground in Venezuela. "But you'd have to be pretty cynical to say that every single charitable dollar spent on Venezuela needs to be spent in a complete vacuum without any business interests involved... If we can find ways to help people and help businesses, that's a good thing."

Putting aside the Air Drop campaign, AirTM has offered important services to Venezuelans struggling with their country's stifling inflation. Government efforts to battle Venezuela's hyperinflation have been akin to using a garden hose to fight a wildfire. The country's central bank has tried chopping zeroes from the end of their bills multiple times to make day-to-day transactions easier, but to little avail.

AirTM's service provide a life raft for many Venezuelans whose savings would otherwise be swept away by inflation. In facilitating the trade of near-worthless bolivares for dollars or digital money, the app could allow Venezuelans to retain as much value as possible from their fast-vanishing paychecks.

Ultimately, $10 won't pull anyone out of poverty — a family of three in Venezuela needs $6 to $10 per day to get by — though it could certainly help a recipient purchase a meal. Beyond the good it could do for hungry Venezuelans, the Air Drop Venezuela campaign will also set a precedent for future crypto-aid campaigns. Parsa of AirTM says he's received interest from at least one nonprofit in Zimbabwe.

"There's a lot of people lined up to see Air Drop Zimbabwe happen," he says.

It's hoped any future campaign will have fewer speed bumps than the one in Venezuela. 

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