Good morning. Government regulators scored a legal victory last week when a federal judge held that a decentralized cryptocurrency collective was liable for violating commodities exchange rules.

The question now, reports Risk & Compliance Journal's Dylan Tokar, is how they will get the collective to pay up.

• The ruling: In his ruling on Thursday, Judge William Orrick of San Francisco ordered the DAO sued by the U.S. Commodity Futures Trading Commission, Ooki, to pay a $643,542 fine. He also approved the CFTC’s request for an order to take down a website associated with the group and the blockchain-based app it controls, a virtual currency trading protocol.
   
• Precedent-setting: The ruling was a win for the CFTC. Together with another ruling by Orrick from December, it suggests that regulators or private plaintiffs who want to sue so-called decentralized autonomous organizations, or DAOs, have a legal basis for doing so.
   
• But how to enforce the judgment? What is less clear is how easy it will be to collect on a legal judgment against a DAO, whose members are often anonymous and informally organized. “I have no idea how they are going to enforce it,” said Arina Shulga, a securities lawyer at the law firm Nelson Mullins.

Sam Bankman-Fried takes fight over federal fraud case to Bahamas.

FTX founder Sam Bankman-Fried wants to make his case to the Bahamas that some of the U.S. fraud charges he faces over the collapse of the crypto-exchange violate the terms of his extradition from the island nation.

U.S. prosecutors need consent from the Bahamas to proceed with charges that were added after Bankman-Fried was transferred to U.S. custody. Bankman-Fried is asking a Bahamian court to postpone that decision and give him an opportunity to make arguments in the Bahamas that some of the charges are improper. A Bahamian judge is expected to rule Tuesday on whether to temporarily block any potential consent to the charges.

• In the hours before an Ohio refinery accident killed two workers last year, BP supervisors opted to keep the plant running despite a series of malfunctions and a petroleum spill serious enough to prompt major equipment shutdowns, according to a preliminary report by government investigators.
   
• Donald Trump lashed out at federal prosecutors and portrayed himself as a victim of political persecution hours after pleading not guilty in a Miami court to charges that he illegally retained and shared classified national-security documents after leaving the White House.

Fed-rate projections could rise to underscore inflation anxieties.

Federal Reserve officials’ concerns about stubbornly high inflation could lead them to signal that they are prepared to lift interest rates again this year even if they hold them steady on Wednesday.

Price pressures continue. The Labor Department reported Tuesday that overall inflation slowed in May but underlying price pressures remained firm. The figures are likely to keep the Fed on track to forego a rate rise this week following 10 consecutive increases.

China’s central bank moves to shore up recovery.

China’s central bank unexpectedly trimmed two key lending rates, a sign of policy makers’ growing unease over a sputtering recovery that likely foreshadows further steps to nudge China’s economy back on track.

Will it help? Economists, though, say lower borrowing costs might not do much to help China’s weak recovery, as households and businesses have so far shown little appetite to borrow amid already high debt levels and subdued prospects for growth.

• Chinese Businesses Look to New Frontiers in Middle East
• China Tells Blinken It’s Up to the U.S. to Ease Tensions

• Russian President Vladimir Putin said Moscow had been able to fight off Ukraine’s counteroffensive so far, but acknowledged losing a significant number of tanks and missing key equipment such as drones as fighting in southern and eastern Ukraine heats up.
   
• The U.S. Central Intelligence Agency warned the Ukrainian government not to attack the Nord Stream gas pipelines last summer after it obtained detailed information about a Ukrainian plot to destroy a main energy connection between Russia and Europe, officials familiar with the exchange said.
   
• Scientists, firefighters and residents of remote communities in Canada are experiencing a transformation of the vast green expanse of woods and wildlife into a tinderbox that can explode under the right conditions. They are seeing changes to the ecosystem that scientists link to a warming climate.

Spy tool helped FBI solve pipeline hack, other major crimes, U.S. officials say.

Intelligence gleaned through a surveillance program due to lapse at the end of the year helped U.S. investigators solve a 2021 cyberattack that prompted the shutdown of the largest conduit of fuel on the East Coast, and claw back millions of dollars in ransom the pipeline’s operator paid to the perpetrators, senior U.S. officials said.

The program, authorized under what is known as Section 702 of the Foreign Intelligence Surveillance Act, enabled the administration to confirm the identity of the hacker responsible for the attack on the Colonial Pipeline, which caused a dayslong gasoline shortage, the officials said.

• France says its Foreign Ministry website was spoofed by Russia as part of a sprawling online campaign to spread false anti-Western propaganda aimed at weakening support for Ukraine.

• Inflation fell in May to around half last year’s peak but remained elevated, showing Federal Reserve officials made progress in cooling price pressures but could have more work to do.
   
• Nvidia ended trading Tuesday with a valuation of more than $1 trillion, becoming the seventh U.S. company to reach that status.
   
• Binance, the world’s largest crypto exchange, set up an emergency fund in 2018 to reassure customers their digital assets would be safe. Now that federal regulators have zeroed in on Binance, its rainy day fund has fallen in value by 11%.
   
• Cracks are forming in a Wall Street institution: the vaunted Goldman Sachs partnership.
   
• Half of workers aren’t engaged on the job, putting in minimal effort to get by, according to research by Gallup released Tuesday. Employee engagement, a measure of involvement and enthusiasm at work, in the U.S. declined for the second year in a row.

Follow us on Twitter 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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