Good morning. A former manager at Coinbase Global has reached a settlement with regulators over a novel cryptocurrency enforcement action without resolving a key question for the Securities and Exchange Commission and the crypto industry: which of the exchange’s digital assets are securities.

• The settlement: Ishan Wahi’s deal with the SEC ends insider-trading claims over the agency’s allegations that his trading tips involved crypto assets that are actually securities. While Wahi won’t pay any financial penalties to the SEC, he was recently sentenced to two years in prison in a related criminal case.
   
• The case: Wahi has admitted in criminal court to tipping off his brother, Nikhil Wahi, and college friend Sameer Ramani to token listings before they were made public. The SEC alleged that nine of the traded tokens were securities sold in violation of federal investor-protection laws. Tuesday’s deal doesn’t specify which tokens are securities but prohibits Ishan Wahi from denying the SEC’s allegations.
   
• Wahi's argument: Wahi and his lawyers sought early dismissal of the case, arguing the digital assets aren’t securities. Coinbase, which is facing the prospect of a regulatory lawsuit, also filed a brief in Wahi’s case disputing the SEC’s authority to regulate its business. Because Coinbase is itself a target of an SEC enforcement probe, Wahi’s interests were aligned with his former employer’s, even though it fired him and cooperated with insider-trading investigations.
   
• The SEC's view: SEC Enforcement Director Gurbir Grewal suggested in a statement that the outcome supports the agency’s claims about Coinbase’s assets. “The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC,” he said.

Sam Bankman-Fried could have some charges dropped if Bahamas objects.

The Justice Department said it would drop some of the criminal charges against FTX founder Sam Bankman-Fried if the Bahamas says they violate the terms of his extradition to the U.S.

Federal prosecutors said in a filing late Monday that they were waiting on the Bahamian government’s approval of three additional counts that they brought against Bankman-Fried after his arrest and extradition in December.

Former Wells Fargo executive blamed in fake-accounts scandal settles with SEC. 

The former head of Wells Fargo’s community bank has reached a $3 million settlement with the Securities and Exchange Commission over her alleged role in a scheme to set up unwanted accounts. Carrie Tolstedt, who pleaded guilty in March to obstructing regulators examining allegations of sales misconduct, settled without admitting or denying the SEC’s claims.

Wells Fargo paid $3 billion in 2020 to settle investigations by the Justice Department and the SEC as part of the same fake-accounts scandal.

• Noncompete clauses violate the federal law that governs union organizing and workers’ rights to collective action, according to a memo released Tuesday by the top lawyer for the National Labor Relations Board.
   
• A federal appeals court in New York reinstated a bankruptcy settlement that protects Purdue Pharma’s Sackler family owners from civil lawsuits accusing them of fueling the opioid addiction crisis.
   
• In dueling lawsuits, Republican Florida Gov. Ron DeSantis and Walt Disney Co. are locked in a legal battle over corporate power, governmental control and freedom of speech, without a clear-cut advantage for either side.

AI poses ‘risk of extinction’ on par with pandemics and nuclear war, tech executives warn.

Tech executives and artificial-intelligence scientists are sounding the alarm about AI, saying in a joint statement Tuesday that the technology poses an extinction risk as great as pandemics and nuclear war. More than 350 people signed a statement released by the Center for AI Safety, an organization that said it works to reduce AI risks.

“Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war,” the organization said.

Debt-ceiling deal does little to change direction of federal spending, economy.

A proposed deal to lift the federal debt limit would have only a small effect on the cooling U.S. economy or still-high inflation, according to economists, because it does little to reduce government spending that grew rapidly during the Covid-19 pandemic and its aftermath.

• A Chinese jet fighter flew within 400 feet of the nose of a U.S. reconnaissance aircraft last week, the U.S. military said Tuesday, in what it described as an “unnecessarily aggressive maneuver.”
   
• China’s era of rapid growth is over. Its recovery from zero-Covid is stalling. And now the country is facing deep, structural problems in its economy.
   
• India and China have ejected each other’s journalists in recent weeks, virtually wiping out mutual media access and deepening a rift between the world’s two most populous nations.
   
• The United Arab Emirates has pressed the U.S. to make more muscular moves to deter Iran after the Islamic Republic’s military seized two oil tankers in the Gulf of Oman in recent weeks, U.S. and Gulf officials said.
   
• A wave of drones struck residential buildings in Moscow for the first time since the Ukraine war began, with several downed in a neighborhood near one of President Vladimir Putin’s residences, in an attack that Russia blamed on Kyiv.

• Ukraine and its allies are planning a summit of global leaders that would exclude Russia, aimed at garnering support for Kyiv’s terms for ending the war, according to a senior Ukrainian presidential adviser and European diplomats.
   
• Goldman Sachs Group is preparing for more layoffs, according to people familiar with the matter, in the latest sign of continued fallout from a deal-making drought on Wall Street.
   
• Prosecutors seeking the death penalty for the man accused of killing 11 people at a synagogue in Pittsburgh in 2018 described a scene of chaos and terror to a jury Tuesday.
   
• China’s foreign ministry said Elon Musk told officials in Beijing that he opposes decoupling the world’s two biggest economies.

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