Good morning. Iraq was a minor market for Visa and Mastercard a couple of years ago, generating just $50 million a month or less in cross-border transactions at the start of 2023. Then it exploded to around $1.5 billion in April that year, a 2900% increase almost overnight.

What changed? Iraqi militia groups figured out how to squeeze dollars on an industrial scale from Visa and Mastercard’s payment networks for themselves and for their allies in Iran, according to U.S. and Iraqi officials and documents reviewed by The Wall Street Journal.

• One door closes, another opens: The shift into cards came after the U.S. Treasury and the Federal Reserve Bank of New York in late 2022 shut down a gaping loophole being used for fraud—international wire transactions by Iraqi banks that lacked money-laundering safeguards. After the U.S. finally closed that spigot, militias quickly found ways to profit from the card scheme.
   
• Poor controls: The U.S. payment giants helped fuel the boom by signing up Iraqi partners to issue Mastercard and Visa-branded cash and debit cards, offering them financial incentives to boost transaction levels. In some cases, the Iraqi issuers had militia ties and inadequate fraud controls in a country known for rampant corruption, documents show.
   
• New cap: Yet after being informed by Treasury of the armed groups’ involvement, the card companies took months to significantly rein in the transactions—which came down from their peak but still ranged from around $400 million to $1.1 billion a month until earlier this year. In an effort to get control of the card payments, the Central Bank of Iraq recently set a cap of $300 million a month, according to people familiar with the matter.

CFTC enforcement chief departs.

Brian Young, who led the Commodity Futures Trading Commission’s enforcement division since January, has left the derivatives-markets regulator after four months on the job. 

Young, in an email sent to the enforcement division last week, said he has taken a federal employee buyout offer for an early retirement and is leaving the agency, according to people familiar with the matter.

Indian billionaire Gautam Adani comes under new scrutiny from U.S. prosecutors.

Gautam Adani, Asia’s second-richest man, is trying to get the Trump administration to drop foreign bribery charges against him. Instead, he is facing a new front in his fight with prosecutors: a probe into whether his companies are buying Iranian petrochemical products.

U.S. prosecutors are investigating whether Adani’s companies imported Iranian liquefied petroleum gas, or LPG, into India through the company’s Mundra port. A Wall Street Journal investigation into tankers that regularly traveled between Mundra and the Persian Gulf found their behavior often exhibited traits seen by ships seeking to evade sanctions.

• Banks are asking the U.S. sanctions enforcer for more clarity on what they need to keep to comply with a new rule requiring them to retain records for 10 years.
   
• A bipartisan group of U.S. lawmakers has introduced legislation they say would bring clarity to cryptocurrency regulation, in part by defining roles for two key agencies.
   
• Apple is challenging an order from the European Union’s antitrust watchdog specifying how it needs to make its iOS operating system more compatible with rival tech companies’ products under the Digital Markets Act.
   
• The European Commission fined food delivery groups Delivery Hero and Glovo 329 million euros ($373.4 million) over what it said were cartel practices before Delivery Hero acquired a controlling stake in its Spanish competitor in 2022.

Hegseth warns of 'devastating consequences’ should China seek to ‘conquer’ Taiwan.

Defense Secretary Pete Hegseth vowed that there would be “devastating consequences” should China seek to “conquer” Taiwan, in a speech that appeared aimed at easing concerns in Asia over the U.S. commitment to its allies in the region.

In what was his most assertive statement to date on Taiwan, Hegseth issued a stark warning that threats to the island from China “could be imminent.”

Ending parole for 500,000 migrants creates new headaches for employers.

The Supreme Court’s decision allowing the Trump administration to revoke temporary protections for half a million migrants brings the U.S. economy closer to labor shortages in industries and regions that rely on foreign workers.

The impact will take time to unfold, but could be far-reaching. The potential departure of hundreds of thousands of people from the labor force is creating anxiety for employers and adding a fresh dose of uncertainty for an economy already grappling with the administration’s tariff policies.

• French President Emmanuel Macron called for a new partnership between European and Asian nations to protect the rules-based international order and to avoid being dragged into the growing rivalry between the U.S. and China.
   
• Iran has continued to produce highly enriched uranium at a pace of roughly one nuclear weapon’s worth a month over the past three months despite talks between Washington and Tehran on a new nuclear deal, the United Nations atomic agency said.
   
• Ukraine’s unprecedented drone strikes on Russian air force bases weaken Moscow’s ability to wage war on its smaller neighbor and undermine its capacity to threaten more distant rivals such as the U.S. and China—a shift with potentially far-reaching geostrategic implications.
   
• More than 20 Gazans were killed as they made their way to a U.S.-Israeli aid distribution center, Palestinian health authorities said, the latest violence in a chaotic rollout of a new assistance program.
   
• Mexicans voted Sunday in nearly 2,700 judicial races for federal and state judges, a new practice that the government says will stamp out corruption but that opponents fear will give the ruling party control of the judiciary and empower candidates with criminal ties.
   
• A trade truce between the U.S. and China is at risk of falling apart.
   
• Climate startups are feeling the impact of President Trump’s attacks on the energy-transition sector, as funding and job cuts, operational halts and bankruptcies rack up.

• The government’s monthslong quest to wring savings from federal contractors is widening beyond consulting firms and entering a new phase focused on tech companies.
   
• Harvard has trained so many Chinese Communist officials, they call it their “party school.”
   
• Rick Smith, who co-founded and runs the maker of Taser stun guns, tops this year’s list of the highest-paid chief executives, with pay of $165 million.
   
• President Trump plans to push lawmakers on his tax-and-spending megabill this week as he tries to overcome GOP concerns about deficit spending, while the White House is preparing to try to get trade talks with China back on track, key pillars of his second-term economic program.
   
• Stanley Fischer, one of the most influential economists of recent decades, has died. He was 81.
   
• A conservative historian who had flaunted his ties with President Trump won Poland’s presidential election Sunday in a close, high-pressure race that drew the largest turnout since the country shook off Communism in 1989.

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