Technologies

U.S.-Iran escalation shows Washington’s frustration with slow-moving sanctions

Renewed hostilities reopen the question of whether the conflict is grinding toward a settlement or further escalation.

The escalation in hostilities between the U.S. and Iran over the weekend shows the U.S. is running out of patience with the slower-moving sanctions approach, according to analysts.

U.S. forces destroyed two Iranian rocket launchers on Larak Island on Sunday, as the Islamic Republic prepared to fire mine-carrying rockets into the Strait of Hormuz, ending a month-long lull in direct fighting.

The strike was the first publicly acknowledged U.S. attack since late July. Iran responded within hours, firing eight missiles at the King Hussein and Al Azraq air bases in Jordan. Jordanian air defenses intercepted all eight, with no casualties, the government said.

Later Sunday, President Donald Trump threatened on social media to blow up Kharg Island, Iran’s main oil-export hub, to “smithereens.”

“Most of the war has been tactically focused rather than strategic from the outset,” said Ian Ralby, a maritime security expert and president of Auxilium Worldwide. “The question, therefore, is: why this, why now?”

The sanctions campaign may not be hurting Iran’s leadership fast enough for the U.S.’s liking, Ralby said. Treasury Secretary Scott Bessent told Reuters on Sunday that he expects new sanctions on Iran weekly, particularly targeting banks, and that Washington intends to cut Tehran-linked institutions out of the dollar system entirely.

“It may be that the financial pressure was not curtailing Iranian behavior to the level the U.S. anticipated,” Ralby said. Renewed Iranian military activity may also have threatened U.S. forces or interests in the region “at a sufficiently high level of gravity that the U.S. felt it necessary to strike Iranian territory once more.”

The U.S. strike is likely an attempt to break a deadlock rather than a shift in policy, Ralby added. “The status quo has become somewhat stagnant, and I’m sure the U.S. would like to see that change,” he said. But it is unlikely to alter “the continuation of the blockade, or the economic ‘warfare’ being used to try to pressure Iran.”

Potential escalation

Trump’s threat against Kharg Island is likely to remain rhetorical. The terminal has absorbed dozens of strikes since the war began, with its oil infrastructure deliberately spared.

“It is unlikely that the President of the United States will actually carry through on the threat to attack Kharg Island,” Ralby said, noting the island also holds a historic early church that Iran has worked to preserve.

An attack “would be a destruction of cultural heritage as well as destruction of critical oil infrastructure, which would likely cause catastrophic environmental harm,” he said. “Threatening it may seem appealing, but actually blowing it up should hold little appeal.”

Rather than confronting U.S. forces head-on, Iran is more likely to retaliate through proxies and pressure on shipping and energy flows.

“The key to this conflict from the outset has been asymmetry,” Ralby said. “The Iranians have demonstrated an ability to use limited actual force to inflict substantial, actual harm.”

For instance, the Houthis, who control a large part of Yemen and have held sway over the approaches to the Bab el-Mandeb for the better part of a decade, entered the war weeks ago in support of Iran.

With the Houthis restricting navigation through the Bab el-Mandeb, the U.S. and its allies in the region could face a situation where the two major maritime chokepoints used to export the majority of the Gulf’s petroleum products are “subject to manipulation by Iran and its partners,” said Michael Ratney, senior adviser at the Center for Strategic & International Studies.

“We always assume that the Houthis and Iran are part of the same kind of group, but they’re not,” said Claudio Galimberti, chief economist at Rystad Energy. “They have worked in the past quite independently.”

Somali piracy, dormant since 2013, has also returned as coalition navies concentrate on the Red Sea and Hormuz. At least five vessels are currently held, including a tanker seized off Al Mukalla on Aug. 20.

“Enhanced pressure on oil production, the energy market, and global shipping are likely to be the focal points for Iranian retaliation,” Ralby said.

The military campaign remains the dominant force in oil prices. Flows through the strait reached roughly 7 million barrels a day last week via the Omani corridor under U.S. Navy escort, according to Galimberti’s estimates, calling it “a very costly mechanism … but it’s working.”

The strike on Larak threatens to reverse that recovery, injecting fresh uncertainty into commercial shipping through the waterway. “The expectation is that the flows in the next couple of days probably will be lower, and therefore you should expect the price increase for sure,” Galimberti said.

Technologies

Passengers and crew foil co-pilot’s apparent attempt to crash FlyDubai flight to Israel

One of the pilots on a FlyDubai flight headed for Israel stabbed the second pilot, according to Israeli Prime Minister Benjamin Netanyahu.

On-duty flight crew and passengers managed to foil a pilot’s apparent attempt to crash a FlyDubai flight, after reports emerged of a fight in the cockpit.

The incident on flight FZ1073 from Dubai to Tel Aviv happened when a co-pilot stabbed a pilot, according to Israeli Prime Minister Benjamin Netanyahu, who praised the victim’s quick thinking.

“Despite being stabbed and seriously injured, he fought back, resisted, opened the cockpit door, and enabled passengers and crew to overpower the attacker — preventing a catastrophic mid-air disaster. He saved the lives of 174 people, including Israeli citizens and other nationals,” Netanyahu wrote in a post on X.

FZ1073 was diverted to the Tabuk airport in Saudi Arabia, the airline said, after being successfully secured and diverted by flight crew.

FlyDubai in a statement said that an “altercation” occurred on the flight deck of the plane, but did not mention a stabbing.

However, the airline added that the underlying reasons and motives for the clash is currently unknown, urging all parties to refrain from speculation.

The injured pilot was identified by Netanyahu as Indian national Smit Machchhar. No details have been released on the identity of the attacker, except that he was being interrogated by Saudi authorities.

The Indian embassy in Riyadh said on X that Machchhar is in a hospital in Tabuk, and is reported to be in stable condition.

The Israeli Prime Minister also identified the passenger who broke into the cockpit as Yaniv Hayun, calling him a “hero” and adding he deserved “a global medal of honor.”

Flight data from tracking site FlightRadar24 showed that the plane had experienced extreme altitude fluctuations before broadcasting a “general emergency” squawk code.

FZ1073 had dropped from over 14,000 feet in just 29 seconds, and FlightRadar24 also added that vertical speeds ranging from approximately -30,000 to +10,000 feet per minute were observed from the transponder data.

For context, vertical speeds during normal operations rarely exceed plus or minus 4,000 feet per minute, it added.

Technologies

South Korean President Lee Reins In Alaska LNG Project Participation Following Trump’s Endorsement

South Korea’s proposed $200 billion U.S. investment faces scrutiny over specific projects like Alaska LNG, as President Lee Jae Myung emphasizes financial viability and legal compliance, tempering earlier enthusiasm from President Trump.

South Korea’s proposed $200 billion investment in the U.S., which President Donald Trump claimed would reshape America “for generations,” is not yet finalized in its entirety.

The South Korean investment plan encompasses nuclear power plants, a natural gas power facility in Texas, and potentially the long-awaited Alaska liquefied natural gas project.

Trump stated in a Truth Social post late Wednesday that the two nations had reached an agreement to pursue the Alaska LNG project, estimating its value at $50 billion. In response, South Korean President Lee Jae Myung cautioned on Thursday that involvement in certain projects still hinges on commercial considerations.

Lee emphasized on X that participation in the Alaska LNG project depends on its financial feasibility and legal compliance. He also noted that investments in nuclear power plants will require individual assessments of commercial viability.

The U.S.-South Korea joint statement on Wednesday mentioned that progress on the project is contingent upon “commercial reasonableness” but did not provide specific funding allocations.

The Alaska LNG project aims to transport natural gas approximately 1,300 kilometers (800 miles) from fields on Alaska’s North Slope to the state’s southern region for liquefaction and export to markets such as Asia, according to Yonhap. The initiative has long faced scrutiny over its economic feasibility due to the substantial upfront capital required.

Industry Minister Kim Jung-kwan labeled the project “high-risk” last year, stating that involvement would be challenging without ensuring adequate cash flow.

Overall, the investment package includes $22.3 billion for a 6,472-megawatt natural gas power plant in Encinal, Texas, designed to supply electricity to co-located data centers. The project will be spearheaded by developer Related Cos. and U.S. energy company NextEra Energy.

Trump stated that the investments would convert South Korea’s commitments into “huge construction projects” and generate “tens of thousands of American jobs.”

“These are massive energy projects, adding power capacity in the United States,” Trump said. “This is new construction, new manufacturing, and great jobs for American workers.”

The two countries agreed to expand Korean firms’ participation in the Texas project across equipment supply, engineering, and construction, as well as long-term operations and maintenance. The U.S. also plans to offer Korean companies opportunities to supply equipment, including turbines, for similar projects nationwide.

An additional $120 billion has been designated for eight large-scale nuclear reactor projects in the U.S. Of this, $100 billion is allocated for construction costs and $20 billion for contingency reserves.

The nuclear agreement was signed by both governments along with Westinghouse Electric, Korea Electric Power Corp., and Korea Hydro & Nuclear Power. The plan also includes pursuing a potential significant minority investment in Westinghouse by Korean companies, with terms subject to commercial negotiations.

Technologies

SEC Advances Crypto Custody Rules as Major Legislation Languishes in Congress

The SEC has proposed new crypto custody rules for investment advisers and funds while comprehensive legislation remains stalled in Congress, creating a regulatory pathway for digital asset holdings.

The U.S. Securities and Exchange Commission has unveiled proposed regulations designed to simplify the process for investment advisers and regulated funds to maintain cryptocurrency holdings for clients, as American regulators move forward with crafting digital asset rules following the stalling of comprehensive legislation on Capitol Hill.

The proposal, revealed Thursday, would create a specialized framework governing how registered investment advisers, investment companies, and business development companies maintain custody of crypto assets.

The modifications aim to update decades-old custody requirements and eliminate regulatory obstacles that the SEC says have restricted advisers’ capacity to provide crypto-related investment options.

Under the proposed regulations, crypto assets could be held in self-custody under “certain circumstances,” while state trust companies could also function as custodians for crypto assets belonging to clients and regulated funds.

The changes could also grant regulated funds expanded authority to offer investors crypto-related investment strategies, according to the SEC.

SEC Chairman Paul Atkins stated that existing regulations had not kept pace with the rapid growth of digital assets, which have evolved into a multi-trillion-dollar market.

“Today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before,” Atkins said.

The proposal arrives as U.S. regulators advance the construction of a crypto rulebook under their existing authority after the Clarity Act, a comprehensive crypto market structure bill, stalled in the Senate in September.

This represents another step in the SEC’s broader initiative to reshape the U.S. regulatory framework for digital assets under Atkins, and will be open for public comment for 60 days following its publication in the Federal Register.

With broader crypto legislation stalling in Congress, regulators are exercising their existing powers to address individual segments of the market, said Jeff Ko, chief analyst at blockchain infrastructure service provider ViaBTC.

“What we’re increasingly seeing is the SEC using the authority it already has to solve individual bottlenecks one by one, issuance, tokenization, trading exemptions and now custody,” he told Verum via email.

The changes could also intensify competition among crypto custodians, potentially reducing the cost and complexity of investing in digital assets, he said, adding that institutional custody has historically been concentrated among a relatively small number of providers.

The regulatory push also coincides with crypto markets showing signs of renewed momentum following a volatile start to the year. Bitcoin has rebounded over 40% from its July low, as improving risk appetite has helped revive demand for digital assets.

The recovery follows a prolonged downturn from late 2025 into the first half of 2026.