Good morning. U.S. authorities have filed criminal and civil charges against Nader Al-Naji, founder of cryptocurrency trading and social-media platform BitClout, alleging he defrauded investors.

Al-Naji, under the pseudonym “Diamondhands,” was arrested on Saturday and presented to a magistrate judge in California on Monday, the Justice Department said Tuesday.

• The charges: The 32-year-old Los Angeles resident faces one count of wire fraud, which carries a maximum prison sentence of 20 years if convicted, according to a sealed complaint filed by federal prosecutors in Manhattan. The U.S. Securities and Exchange Commission also filed charges against Al-Naji, alleging fraud and the unregistered offering and sale of cryptocurrency. The securities regulator also named his wife and mother as defendants in the case.
   
• Who is Al-Naji? His arrest marks the downfall of an entrepreneur whose BitClout project is backed by venture-capital firms Sequoia Capital and Andreessen Horowitz, also known as a16z. A former junior world champion rower, Princeton University graduate and former Google software engineer, Al-Naji also raised more than $133 million for his last project, Intangible Labs, to develop a new stable cryptocurrency called Basis.
   
• The allegations: Since 2020, Al-Naji allegedly raised more than $257 million by offering and selling cryptocurrency to investors by promoting BitClout as “decentralized." But the SEC said the decentralization aspect of the project was a deceptive attempt to avoid regulatory scrutiny, and alleged he used the proceeds to enrich himself, his close relatives and his companies by diverting millions of dollars of investor funds toward luxury purchases.

Mozambique wins $825 million-plus legal victory in 'tuna bonds' bribery scandal.

Mozambique won a bribery case in U.K. court against Privinvest, a shipbuilder founded by the late Lebanese billionaire Iskandar Safa. The court ruled Monday that Privinvest must pay at least $825 million for its role in the African country’s “hidden debts” affair.

The so-called tuna bonds scandal, exposed in an investigation by The Wall Street Journal, involved raising billions of dollars from emerging-markets debt investors, who were told the funds would go to maritime projects designed by Privinvest. It left Mozambican taxpayers on the hook for $2 billion of debt and interrupted the nation’s access to international aid.

The trial revealed “a developing nation being exploited by highly developed institutions and corporations,” London Commercial Court Justice Robin Knowles said in his ruling. Mozambique was “also let down by its own officials and office holders,” he said. 

Meta settles Texas’ facial-recognition case for $1.4 billion.

The state of Texas has reached a $1.4 billion settlement with Facebook parent Meta Platforms over the company’s since-discontinued use of facial-recognition technology.

Attorney General Ken Paxton said the state’s landmark deal will require Meta to pay the sum over five years, resolving claims that the technology violated Texans’ privacy rights.

• Spain’s competition regulator fined Booking.com 413.2 million euros, equivalent to $447.1 million, saying the online travel company abused its dominant market position in the country over the last five years. 
   
• The Senate overwhelmingly passed legislation Tuesday requiring technology companies to take steps to protect children from harmful content on the internet, but the effort faces an uncertain fate in the House because of concerns about free speech.
   
• Tesla is recalling more than 1.8 million vehicles in the U.S. due to a software issue that could result in the hood fully opening and obstructing the driver’s view.
   
• Meta Platforms is running ads on Facebook and Instagram that steer users to online marketplaces for illegal drugs, months after The Wall Street Journal first reported that the social-media giant was facing a federal investigation over the practice.

Hamas political leader Ismail Haniyeh killed in Iran.

Hamas’s political leader, Ismail Haniyeh, was targeted and killed in the Iranian capital Tehran, the country’s Islamic Revolutionary Guard Corps said Wednesday.

The IRGC said it was still investigating the cause of the incident.

Hamas confirmed the death of Haniyeh, saying the leader had been killed by Israel after attending the inauguration ceremony Tuesday of the new president of Iran, Masoud Pezeshkian.

• Israel Says It Killed Hezbollah Commander in Beirut, in Response to Golan Heights Attack
• Two Enemies of Israel Are Killed, and the Mideast Tilts on the Brink of Wider War

• The Bank of Japan on Wednesday raised its benchmark interest rate and cited concerns about the historically weak yen, leading to a jump in the Japanese currency.
   
• There’s a growing gap between Americans who are battered by high inflation and interest rates and those who are actually benefiting.
   
• Inflation unexpectedly heated up in the eurozone this month, presenting a fresh challenge to policymakers looking for signs that eurozone price rises are easing sustainably.
   
• China’s manufacturing activity extended its run of declines to a third straight month in July, signaling continued weakness in the economy a day after the country’s communist leaders pledged to introduce more pro-growth measures.
   
• Strongman Nicolás Maduro’s regime vowed to crush a burgeoning protest movement against election results that cement his grip on power, amid growing evidence he lost by a wide margin and violent clashes between demonstrators and security forces.

• Appearing before two Senate committees, the new leader of the Secret Service, Ronald Rowe said the agency has taken steps to enhance security for its protectees, including by expanding the use of drones to help detect threats on roofs and other elevated areas. 
   
• X Corp. Chief Executive Linda Yaccarino keeps running into a problem: She doesn’t always have the final say.
   
• To understand safety issues surrounding Tesla’s Autopilot, The Wall Street Journal undertook a comprehensive analysis of crash data, uncovering previously obscured details by combining heavily redacted federal filings with local police records.
   
• Microsoft’s artificial-intelligence ambitions are putting up some big numbers. Just not in the right column.

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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