Good morning. The Federal Trade Commission is investigating whether OpenAI’s ChatGPT has harmed people by publishing false information about them, posing a potential legal threat to the popular app that can generate eerily humanlike content using artificial intelligence.

In a civil subpoena to the company made public Thursday, the FTC says its investigation of ChatGPT focuses on whether OpenAI has “engaged in unfair or deceptive practices relating to risks of harm to consumers, including reputational harm.”

• Unchecked mining: FTC Chair Lina Khan, who appeared before the House Judiciary Committee on Thursday, said the agency is concerned that ChatGPT and other AI-driven apps have no checks on the data they can mine.
   
• Going astray? For critics of the FTC, the probe represented another venture into uncharted territory for an agency that has suffered recent legal setbacks in its antitrust enforcement efforts.

Treasury’s sanctions chief is appointed director of financial crimes bureau.

The U.S. Treasury Department on Thursday said it was appointing Andrea Gacki, who has led the agency’s economic-sanctions program, to be director of its Financial Crimes Enforcement Network.

Gacki’s appointment to lead FinCEN comes as the Treasury division juggles a series of weighty government mandates, from helping to crack down on Russia sanctions evasion to building a corporate ownership database to tamp down on the use of anonymous shell companies. FinCEN serves as the U.S.’s financial-intelligence unit and as an important banking regulator.

Ripple ruling deals a blow to SEC's effort to regulate crypto.

A cryptocurrency company defeated a significant part of the Securities and Exchange Commission’s enforcement case over its sale of more than $1.4 billion worth of a digital token known as XRP.

U.S. District Judge Analisa Torres agreed with Ripple Labs’ argument that roughly half of its sales of XRP didn’t violate investor-protection laws. Ripple has argued that XRP, a token developed to facilitate cross-border payments, isn’t a security. The decision Thursday could buttress claims made by major cryptocurrency exchanges that are fighting similar SEC allegations over token trading.

• A former Mozambique finance minister pleaded not guilty to corruption charges in a New York federal court Thursday for what prosecutors called a kickback scheme involving $2 billion in fraudulent loans that nearly led to the collapse of the African country’s economy.
   
• Celsius Network founder Alex Mashinsky was arrested in New York early Thursday morning and charged with defrauding the collapsed crypto exchange’s customers, part of an expanding federal crackdown on the cryptocurrency industry.
   
• Elon Musk’s Twitter asked a federal court to terminate a 2022 settlement it agreed to with the Federal Trade Commission over alleged privacy violations, saying it had been subject to a “burdensome and vexatious enforcement investigation.”
   
• Free-speech advocates and academics sued Texas over its TikTok ban, saying it violates the First Amendment rights of public-university faculty.
   
• Iran is now replicating parts for deadly drones being used by Russia in Ukraine, helping its military evade international sanctions with domestically made components that it once sourced from overseas, according to a new analysis.

Is the banking crisis over? We are about to find out.

Lenders will sort through the damage from this year’s banking crisis when they report their financial results starting Friday.

Earnings for the second quarter will show whether the recent failures of three lenders and a slowing economy are eroding what has been a long period of strength for the industry. Earnings are expected to fall 7% in the quarter from a year earlier, according to Keefe, Bruyette & Woods.

U.S. tries to build ties in China’s backyard.

Treasury Secretary Janet Yellen is visiting two of China’s neighbors where she has pushed firms to move their operations—a week after she reassured officials in Beijing that the U.S. wasn’t out to sever trade and investment ties.

The trip to India and Vietnam underlines a central tension in the U.S.-China economic relationship: Yellen and the Biden administration must figure out how to promote alternatives to China without further upsetting relations with Beijing.

• Xi Jinping Chokes Off Crucial Engine of China’s Economy
• As Concerns About China Grow, Germany Loosens Its Embrace

• Insurers are caught in the crossfire of an escalating battle over climate change.
   
• North Korean leader Kim Jong Un oversaw the launch of an intercontinental ballistic missile in a show of force toward the U.S.

• The dearth of accountants is becoming evident in several financial reports, with companies pleading difficulty in finding and retaining skilled people.
   
• AI technology is developing fast, but the physical computing infrastructure that powers the models is still racing to keep up.
   
• Business insurance has been roiled by the same forces disrupting home insurance markets in catastrophe-prone areas, with firms facing tougher conditions as they try to cover properties.
   
• FDA approval of Alzheimer's drug Leqembi is expected to encourage venture funding for treatments of brain diseases, a field that has long thwarted drugmakers.

🎧 Listen to Sweetgreen Chief Brand Officer Nathaniel Ru speak to WSJ Pro about how the salad chain is striking a balance between traditional advertising and social-first creative campaigns.

• President Biden said that the U.S. continues to press Russia to release detained Wall Street Journal reporter Evan Gershkovich and is “serious about a prisoner exchange” to secure his freedom.
   
• PepsiCo reported strong growth in sales and profit as consumers continued to shrug off price increases and spend on Doritos, Cheetos and other snacks. Booming summer travel and falling fuel prices helped drive record revenue and profit in the second quarter for Delta Air Lines. 
   
• A luxury tower built for New York’s elite still sits half empty.
   
• The hum of air conditioners is getting louder and more expensive in parts of the U.S. where people used to open a few windows to stay cool in summer.
   
• Exxon Mobil is paying almost $5 billion to buy a pipeline operator that moves carbon dioxide, increasing its bet that it can make money collecting other companies’ emissions.

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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