A Reuters investigation of more than 80 Chinese academic papers and patents has found People's Liberation Army-linked researchers using AI model distillation to transfer reasoning capabilities from OpenAI and Anthropic systems into smaller, locally deployable models. The findings expose a structural gap in U.S. export controls that were designed to restrict chips, not the text those chips produce.

The U.S. Treasury sanctioned Dubai-based crypto exchange Shelbit for allegedly facilitating a $4 billion Iran crypto sanctions evasion scheme linked to the IRGC — but the exchange was still processing funds even when its website was completely offline. The case exposes a structural gap between on-chain activity and enforcement response that has significant implications for compliance professionals and crypto market participants.

South Africa's National Treasury and the South African Reserve Bank have released draft rules defining when crypto transfers become regulated cross-border events under the country's capital flow regime. The South Africa crypto regulation framework is narrower than initial headlines suggest — and its biggest gap may be stablecoins.