Good morning. Polymarket faced a major fraud attack in February where thieves linked stolen debit cards to accounts and tried to steal at least $10 million. At one point, the processor rejected as fraudulent more than 80% of the deposits it was handling, a rate that far exceeded industry standards of roughly 1%. Polymarket employees quickly raised their concerns with Chief Executive Shayne Coplan, according to people familiar with the events.

The compliance team, those people recalled, was floored by Coplan’s response: Just keep growing and pay a fine if regulators ever find out. Current and former employees said Coplan’s reaction, which hasn’t previously been reported, was characteristic of his plan for Polymarket—growth at all costs. Polymarket is doing everything in its power to woo new users and investors.

• Atypical: Former regulators from the CFTC, Justice Department and Internal Revenue Service said the level of attempted fraud and Polymarket’s response was atypical for the commodities and gambling industries. Unlike traditional commodities exchanges, Polymarket accepts funds directly from retail traders, making it more vulnerable to fraud attacks.

• Mounting legal challenges: The Commodity Futures Trading Commission is investigating Polymarket, and employees have been told to retain records related to the fraud attack and other topics, according to people familiar with the matter. The New York City Council is probing the advertising practices of Polymarket and other prediction markets, and Polymarket has been accused in lawsuits of deceptive business practices by almost two dozen traders.

• A push for funds: As legal risks pile up, Coplan is in the process of raising $1 billion, in a fundraising round that would value the company at around $21 billion. Donald Trump Jr.’s investment fund 1789 Capital is investing roughly $300 million in the round, in addition to the roughly $200 million it has previously invested.

In case you missed it: In this week’s podcast, we look at why the conflict between the U.S. and Iran could ultimately be reshaped by Yemen’s Houthis, and how the slowdown in AI development called for by CEOs may be easier said than done. 

 Listen to new episodes every Friday on Apple Podcasts, Spotify and Amazon. 

Crypto blew its big moment—and the blame game has begun

The Clarity Act, a landmark bill meant to usher digital assets into wider use, collapsed after U.S. senators officially voted it down. It marked a spectacular choke by an industry that had just recently begun reveling in its new lobbying clout, with President Trump in its corner.

The blame game began immediately. Some crypto executives and lawmakers pointed to Democratic resistance after Trump’s massive crypto profits, disclosed in June, raised fresh ethics concerns about the president’s businesses. The war in Iran, inflation and the backlash against data centers and rogue artificial-intelligence agents all became bigger priorities for lawmakers as 2026 dragged on. Others said the industry squandered its chance to close the deal earlier in the year, before any of those forces gathered steam.

California’s Newsom issues executive order to weigh AI oversight, including ‘kill switch’

California Gov. Gavin Newsom issued an executive order ramping up the state’s oversight of artificial-intelligence systems and their safety and security risks.

The Friday order would convene experts to mull possible AI-oversight policies, including requirements for frontier AI labs to embed independent evaluators, get independent verification of their safety frameworks and reports and create a “kill switch” for cutting-edge models.

• The U.K.’s financial watchdog has opened an investigation into payments provider Euro Exchange Securities over potential money laundering offenses, Risk Journal reports.

• Malaysia’s former Prime Minister Najib Razak can serve the remaining two years of his sentence for abuse of power in the looting of the 1MDB sovereign-wealth fund under house arrest, the government said Friday.

• Uber was ordered to pay $40 million to the parents of Emily Normandin-Parker, a 23-year-old woman who was hit and killed on a freeway.

• The U.S. has tightened sanctions on Cuba, targeting its nickel-mining infrastructure and defense industrial base, Risk Journal reports.

• Air Corsica grounded four of its seven ATR turboprop aircraft after pilots reported suspected fumes leaking into the cockpit and cabin.

• The U.S. and China view AI safety differently, with American dialogue centered on protecting humanity from the technology, while Beijing is chiefly concerned with safeguarding the Communist Party.

• A new Federal Reserve inquiry into the 2023 collapse of Silicon Valley Bank found that bank-supervision staff in the Biden era could have anticipated and prevented the bank’s failure, said Michelle Bowman, the President Trump ally who now leads the Fed’s bank supervision.

• Stablecoin issuer Bastion received conditional approval for a national trust bank charter on Friday, opening the door to the traditional financial system.

The potential investment Paramount could make in California, as California’s attorney general and the company discuss a series of potential concessions as part of advanced settlement negotiations, according to people familiar with the discussions.

How Harley-Davidson, an American Icon, Became a Tariff Punching Bag

When foreign governments want revenge for U.S. tariffs, America’s most celebrated motorcycle manufacturer usually makes the hit list.

The European Union hit Harley-Davidson with 25% retaliatory tariffs in 2018. In 2025, the EU threatened another round, while Canada imposed its own levy. Then this month, Canada struck again with a 50% import duty on the company’s products as part of a wide-ranging response to heightened U.S. tariffs.

Scott Lincicome, vice president at the Cato Institute, a free-market think tank, said it is no mystery why Harley keeps finding itself in the tariff crosshairs. The company’s All American brand identity and swing state location make it a natural target for retaliation, he said.

Automakers Urge Trump Not to Allow Chinese Cars Into U.S. Ahead of Xi Summit

A coalition of auto-industry groups urged President Trump to keep Chinese cars out of the U.S. ahead of a meeting with leader Xi Jinping, saying any entry by Chinese newcomers would undermine jobs and national security.

In advance of Trump’s state dinner with Xi, the group—including the Alliance for Automotive Innovation and the National Automobile Dealers Association—implored the president to “maintain policies that keep the door firmly shut to Chinese automakers seeking to sell, import or manufacture vehicles inside the U.S.”