ICBA sues Trump administration over bank charters for crypto companies
The Wall Street Journal’s Morning Risk Report newsletter summarized several risk and compliance developments, with its lead item reporting that Director of National Intelligence Jay Clayton will chair a new White House task force giving the administration 120 days to report on the risks and opportunities of artificial intelligence and determine the federal government’s responsibility. According to the newsletter, Clayton effectively becomes the administration’s AI czar.
The newsletter’s substantive original reporting centered on four other items. Federal prosecutors on Thursday arrested and charged Greg Lui, 38, of San Gabriel, California, with conspiracy to violate export control laws, outbound smuggling and conspiracy to commit money laundering, the Justice Department said. The servers contained U.S.-made graphics processing units commonly used for AI applications and were valued at $300 million, according to the newsletter, which cited Risk Journal’s Anwar Faruqi.
The Independent Community Bankers of America filed suit against the Trump administration on Friday, accusing regulators of allowing “highly risky cryptocurrency and digital asset activities” to enter the banking system without the same level of regulatory oversight applied to banks. The lawsuit followed regulators’ moves to grant bank charters to a wave of cryptocurrency companies, the newsletter reported, escalating a fight between traditional banking and the crypto industry.
Amazon Web Services, the cloud-computing arm of Amazon.com, published a memorandum Friday calling the fight for AI dominance “the race our nation can’t afford to lose.” AWS Chief Executive Matt Garman said the company would invest more than $1 billion over the next five years into communities hosting its data centers, beyond what Amazon has already committed. The funding is earmarked for education, job training, water preservation and other local priorities, the memo said. Garman pushed back on concerns about the data centers’ environmental and energy effects, on doubts about job creation, and warned of rampant misinformation campaigns surrounding the buildout.
In aviation security, a FlyDubai pilot stabbed his captain and sent a plane carrying around 170 people into a dive so steep it nearly tore apart in midair on Wednesday, according to the newsletter. The pilot had concealed his intentions on a route the newsletter described as one of the world’s most sensitive, connecting the United Arab Emirates and Israel. Michael Horowitz, a security and geopolitical analyst who wrote a book about Israel’s future in the Middle East, said “This is 100% a major security failure” and asked how broad and how bad the failure might be. FlyDubai suspended its flights to Israel while the investigation continued. The newsletter said the answer will weigh on Israel’s air links to the world and on the U.A.E.’s core aviation and tourism businesses.
Two shorter items rounded out the newsletter. The Group of Seven major economies had agreed to release barrels of crude oil and fuel from emergency stocks with the goal of bringing down the soaring price of diesel and other fuels. The newsletter also carried a quip from Elon Musk, posting on X: “Best way to sandbox an AI is to put it on a Delta flight—it will have no chance of accessing the Internet!” The newsletter noted that Musk has had a public blowup with Delta and Chief Executive Ed Bastian over the airline’s decision not to use Musk’s Starlink in-flight Wi-Fi service, and that Delta’s rivals are trying to capitalize on the moment.
A sidebar in the newsletter observed that America has spent much of the past decade trying to reduce its trade and economic dependence on China, and that doing so is proving difficult. The same sidebar noted that data centers are grappling with becoming military targets.