Good morning. The Treasury Department moved to complete regulations that extend anti-money-laundering measures to certain investment advisers and real-estate professionals, but said it was loosening the requirements after feedback from the two industries.

Published in final form on Wednesday, the rules seek to address what the Biden administration and others have characterized as critical gaps in the U.S. financial system’s safeguards through which criminals and other nefarious actors can move illicit money.

• The rules: One requires certain categories of investment advisers to screen for and report their clients’ suspicious activity. Another requires at least one party in a residential real-estate sale to file a report when the purchase is made with cash and when the recipient is a legal entity or trust. Together, the two rules represent some of the most significant changes to the U.S.’s anti-money-laundering framework in decades. The rules “will make it harder for criminals to exploit our strong residential real estate and investment adviser sectors,” Treasury Secretary Janet Yellen said.
   
• Dialed back: The Financial Crimes Enforcement Network said it modified some aspects of its proposals in response to the feedback. In the final version of the investment adviser rule, the Treasury bureau exempted several types of advisers from the anti-money-laundering requirements. Those now exempt include certain midsize and family advisers and pension consultants. The Treasury also dropped a requirement that the person maintaining an investment adviser’s anti-money-laundering program be located in the U.S. and subject to oversight by the Treasury and any other appropriate federal regulator. Foreign advisers will only fall under the requirements to the extent that a U.S. adviser is involved, or if service is provided to a U.S. person.
   
• And the response: Anti-corruption groups welcomed the new measures; some said they were encouraged to see the Treasury had responded to at least some of their recommendations. Elsewhere, the National Association of Realtors said the final version of Treasury’s residential real-estate rule was “a pragmatic, risk-based approach to combating money-laundering and these other crimes.”

French authorities charge Telegram founder Pavel Durov.

French judicial authorities brought preliminary charges against Telegram founder Pavel Durov for a host of crimes, including complicity in distributing child pornography, illegal drugs and hacking software on the messaging app—a stunning blow for an entrepreneur who became a hero for internet libertarians over the past decade.

The authorities also charged Durov with refusing to cooperate with investigations into illegal activity on Telegram. Paris prosecutor Laure Beccuau cited “an almost complete absence of response from Telegram to judicial demands.”

• Telegram Founder Was Wooed and Targeted by Governments

NFT marketplace OpenSea faces potential SEC lawsuit.

OpenSea, one of the largest and oldest marketplaces for non-fungible tokens, has received a so-called Wells notice from the Securities and Exchange Commission, indicating that it faces a potential SEC lawsuit, according to its chief executive.

“OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities,” OpenSea CEO and co-founder Devin Finzer posted on X on Wednesday. “We're shocked the SEC would make such a sweeping move against creators and artists. But we're ready to stand up and fight.”

A lawsuit against OpenSea would expand the SEC’s crypto crackdown further into the NFT space, by going after a major exchange-like platform where the tokens are bought and sold.

• Yelp sued Google on Wednesday, accusing the search-engine giant of abusing its dominant position to boost its bottom line and stifle competition in local markets.
   
• Two businessmen at the center of one of the largest global frauds in decades were convicted in Swiss criminal court for their roles facilitating the looting of a Malaysian sovereign-wealth fund.
   
• Brazil’s Supreme Court threatened to ban X within 24 hours on Wednesday night unless Elon Musk’s social-media platform appoints a new legal representative for the country, according to an order the court posted on X.
   
• A federal appeals court ruled that a mother’s lawsuit could proceed against TikTok over the “blackout challenge,” raising questions about a law that says social-media companies aren’t responsible for the content its users post. The blackout challenge, which the 10-year-old daughter of the plaintiff died attempting, encourages people to choke themselves until they pass out.
   
• China’s epic housing bust has crushed big developers, bond-market investors and homeowners, causing billions of dollars in losses. Now Chinese regulators are zeroing in on another important player: PricewaterhouseCoopers, the auditor of choice for many of China’s biggest property firms.
   
• Shares in European spirits makers jumped after China said it would temporarily hold back on dumping measures against brandy imported from the European Union, easing a major concern about the potential impact on sales in a key market.

‘Anyone can be a victim’: Sprawling AI fake nudes crisis hits South Korea. 

The victims were reportedly teachers, military officers, undergraduates and elementary-school students. Across a labyrinth of Telegram group chats, anonymous users submitted photos of South Korean girls and women without their permission that were manipulated into sexually explicit images and videos viewed by hundreds of thousands.

South Korean authorities on Wednesday began an investigation to tackle faked pornographic images after a massive network was uncovered—involving hundreds of victims, many of them minors. The revelation reflected the scale of the problem facing South Korea, which according to some researchers is the source for roughly half of so-called “deepfake” porn videos spread globally.

• An oil tanker loaded with roughly a million barrels of crude was on fire and in danger of leaking after it was attacked by Houthi rebels while crossing through the Red Sea.
   
• The Israeli military launched a major ground-and-air operation in the West Bank, a move it said was aimed at preventing terrorist attacks originating from the Palestinian territory. It said Thursday it killed five gunmen, including a militant leader, who were hiding in a mosque.
   
• Asia’s fastest-growing economies are hiding a dirty secret: Their youngest workers are battling stubbornly high rates of unemployment.

• Phil Gordon, the vice president’s national security adviser, is known for breaking with establishment thinking. Now he could find himself in the same role to the president if Harris wins the election in November. It is unclear whether Gordon wants the coveted role, and he studiously avoids the issue when asked about it by aides or friends.
   
• A federal appeals court on Wednesday revived Sarah Palin’s defamation suit against The New York Times, ruling a trial judge committed a series of errors in presiding over the former Republican vice-presidential candidate’s case.
   
• Two top editors of a pro-democracy Hong Kong news outlet were found guilty of sedition charges on Thursday, the first convictions under the colonial-era law against the media in decades as the city’s Beijing-backed authorities press a sweeping legal campaign to clamp down on dissent.
   
• Bosses are quietly trying to reset worker pay levels, saying the era of overpaying for talent is over.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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