TEL AVIV—Relations between President Trump and Israeli Prime Minister Benjamin Netanyahu have had plenty of ups and downs. As the two leaders prepare for a White House visit set for next week, things are decidedly on the upswing.
Trump has showered Netanyahu with praise for leading a 12-day assault on Iran aimed at setting back Tehran’s nuclear ambitions, a conflict the U.S. joined by launching bunker-busting airstrikes on underground Iranian uranium-enrichment sites.
Unlock Premium Insights from The Wall Street Journal
Take your experience further with Mint Premium- access insights and analysis on global markets
Subscribe now Already subscribed? Login
Premium benefits
40+ Premium Articles Daily
WSJ, Economist, Barron's Access
E-paper Access
Explainers & Deep Dives
Stock Analysis & Investment Insights
Mint Lounge & Beyond
As China weaponizes its rare earth dominance and sparks fears over a similar threat in critical minerals, Quad members US, Japan, Australia and India have launched a Quad Critical Minerals Initiative, pledging to work together to secure and diversify supply chains. The demonstration of common purpose comes at a time when India, Japan and Australia are also in bilateral trade talks with US.
China dominates the world's critical mineral supply chain, with interests in mines across the globe and has developed the midstream segment of refining and processing. These form key components in the strategic sector including defence, electric mobility, telecommunications and electronics.
A joint statement by the Quad strategic partners on Wednesday also described the initiative as "an ambitious expansion of our partnership to strengthen economic security and collective resilience by collaborating to secure and diversify critical minerals supply chains".
Also Read | Rare-earth crunch: India’s quest for critical minerals must race the clock
‘Coercion, price manipulation’
"Reliance on any one country for processing and refining critical minerals and derivative goods production exposes our industries to economic coercion, price manipulation, and supply chain disruptions, which further harms our economic and national security," the statement said, making a veiled reference to China. The statement underscored the importance of diversified and reliable global supply chains.
China's ongoing export curbs on rare earths have disrupted global supply chains, slowed industries, and prompted countries to seek alternative sources.
Sankalp Gurjar, professor of geoeconomics at the Gokhale Institute of Politics and Economics said: "This is a significant statement of intent from the Quad countries. China dominates the critical mineral supply market. Chinese dominance has been deployed as a geoeconomic tool. For the Quad countries, supply chain security and critical mineral security are interlinked. The statement is important as it is a strategic signal to China."
Emphasizing on the need for effective implementation of the initiative, Gurjar said: "The real test will be how the Quad countries act on their objective."
Mineral search
The Quad announcement comes at a time when Prime Minister Narendra Modi has left for a five-nation tour to Ghana, Trinidad & Tobago, Argentina, Brazil and Namibia, and critical minerals are expected to feature in his bilateral meetings in these countries.
P. Kumaran, secretary (east), in the external affairs ministry told reporters on Monday: “Argentina’s rich reserves of critical minerals such as lithium, copper and other rare earth elements complement India’s growing need for secure and sustainable supplies to these elements for its clean energy transition and industrial growth. India’s public sector Khanij Bidesh India Ltd.(KABIL) has already won a few concessions in Argentina since 2024. Our leaders will be discussing more on this subject."
Critical minerals and rare earth elements have of late assumed importance in public discourse. The development comes at a time when a Japanese business delegation is in India. During a meeting of key businesses from both the countries in the battery and critical minerals supply chain on Wednesday, the industry representatives suggested that India can be a manufacturing and demand hub for critical minerals. Under a possible partnership of Quad countries, Australia can act as a raw material supplier while Japan and US can provide key technological support for the partnership to succeed.
Also Read | Sona Comstar goes local to cut China imports, plans magnet production in India
Delhi meeting
Some Australian and American businesses in the critical minerals supply chain were also part of the discussions which were held in the national capital.
Australia is the world's largest lithium producer and is a major player in resources exploration, extraction, production and processing of several key minerals including bulk minerals like coal, iron ore and gold. Amid tension with China in the South China Sea, Japan is also trying to diversify sources of critical minerals. In 2023, the US and Japan signed a critical minerals agreement covering five key minerals related to the production of batteries for clean vehicles.
Abhishek Saxena, former public policy expert at Niti Aayog said Quad has been focusing on resilient supply chain in a way that the four countries can dominate the supply chain.
"Take Australia for example. China is dominating the mining and refining of critical minerals there. All the four countries do not want this situation. Critical minerals are going to be a key for all the countries involved. Coming on the background of the rare earth crisis, this can prove to be a crucial partnership initiative," Saxena said.
Also Read | Quad ministers condemn Pahalgam attack, Jaishankar says ‘India has every…’
Galwan and after
Post the diplomatic tussle and military confrontation in 2020 at Galwan, India has made efforts to diversify its sources of critical minerals along with steps to establish a local refining and processing industry for these minerals. In January this year, the government approved the National Critical Mineral Mission, which focusses both developing mines locally, acquiring mines abroad and incentivizing processing of these minerals within the country. In 2022, Centre came up with a list of 30 minerals which the union ministry of mines described as critical to the economy.
India is already is a member of the US-led elite grouping Mineral Security Partnership (MSP). In June 2023, it became the 14th member of the MSP along with the US, Australia, Canada, Finland, France, Germany, Italy, Japan, Norway, the Republic of Korea, Sweden, the UK and the European Commission. MSP seeks to bolster critical minerals supply chains and ensure that these ores are produced, processed and recycled by catalyzing investments from governments and private sector across the full value chain.
The Union cabinet on Tuesday approved ？1 trillion each for schemes to promote employment, as well as research, development, and innovation (RDI) in the country.
The employment-linked incentive (ELI) scheme, aimed at generating 35 million jobs in two years, will provide direct financial benefits up to ？15,000 to 19.2 million first-time employees, Union minister of information and broadcasting Ashwini Vaishnaw said.
“This overall encourages youth to look at formal wage-led jobs instead of part-time, gig or other informal means of livelihood. Coming at a time of reduced interest rates and income tax reduction at entry level, it should be both beneficial for youth to come into employment as well as have a lot more disposable income for consumption," noted Lohit Bhatia, president-workforce management at Quess Corp, one of India's largest staffing firms.
First-time employees are those who register with the Employees' Provident Fund Organisation (EPFO) for the first time. Employees with annual salaries up to ？1 lakh will be eligible.
Also Read | From EPFO 3.0 to free Aadhaar update: Major money rule changes from 1 June 2025
Establishments, which are registered with EPFO, will be required to hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees), on a sustained basis for at least six months.
The benefits would be applicable to jobs created between 1 August 2025 and 31 July 2027. For the manufacturing sector, incentives will be extended to the 3rd and 4th years as well.
For an additional employee with an EPF base wage of up to ？10,000, the employer will receive up to ？1,000 proportionately. For an additional employee with an EPF base wage between ？10,000 and ？20,000, the employer will receive ？2000. Similarly, for an additional employee with an EPF base wage of over ？20,000 but under ？1 lakh, an employer will get ？3,000 as incentives.
The ELI scheme was originally mentioned in the FY25 budget as part of five schemes to facilitate employment, skilling and other opportunities.
A back-of-the-envelope calculation shows that an employer in the non-manufacturing sector hiring 100 additional employees could receive up to ？72 lakh over two years, while a manufacturing sector employer could get ？1.44 crore over four years.
The industry welcomed the ELI scheme. "By incentivizing first-time workers, boosting manufacturing, and encouraging employer participation, it reflects smart, inclusive policymaking. Its emphasis on dignity, security, and formalization aligns deeply with industry aspirations, said Anish Shah, a former president of Federation of Indian Chambers of Commerce & Industry (Ficci).
Also Read | Switching jobs? Delhi High Court makes big observation on non-compete clause
“It tackles two of the biggest challenges in India’s labour market—youth unemployment and informal hiring," pointed out Kartik Narayan, chief executive officer at staffing firm TeamLease Services.
However, an HR consultant said that ？1 lakh annual salary amounts to about ？8,000 per month. "This amount often doesn’t meet the minimum wage bracket and the candidate has to be extremely unskilled. In a job market where the supply of skilled workforce is available, why would the company look for unskilled talent and then invest in them to see a return on their investment," the consultant said on the condition of anonymity.
Bino Paul, professor at the School of Management and Labour Studies at Tata Institute of Social Sciences said that the scheme has the potential to generate positive spillovers. "If the policy is governed constructively, it augments the productive employment opportunities. Thus, it will foster India's progress towards Sustainable Development Goal (SDG) 8, creating a symbiotic link between decent work and economic growth," he said.
According to Rahul Ahluwalia, founding director at Foundation of Economic Development, the scheme focuses on India's biggest asset—labour. "We have regulatory costs which often disincentivize businesses from hiring more. A push to add employees to the roster is likely to reduce that burden on businesses, but we must also cut regulatory costs so businesses can thrive on their own," Ahluwalia said.
The scheme is expected to fuel demand for labour, said Neeraj Hatekar, professor at the School of Development, Azim Premji University. "But demand for labour is derived demand, it comes from the rest of the economy. "If the rest of the economy does well, more people are employed."
The RDI scheme
The RDI scheme will encourage research in sunrise sectors as well as domains relevant for economic security, strategic purpose, and self-reliance. Its key purpose is to provide long-term financing or refinancing with long tenors at low or nil interest rates to spur private sector investment in RDI.
Mint reported on 16 April that the Centre was considering a $4-billion incentives scheme to promote the development of patents and design innovation in critical electronics. The programme is a part of the overall RDI scheme approved on Tuesday.
This comes at a time when India's gross expenditure on R&D has doubled from ？60,196 crore in 2010-11 to ？127,380 crore in 2020-21. However, the share of expenditure on R&D as a part of the country's total economic output has consistently fallen from about 0.83% in 2009-10 to 0.64% in 2020-21.
Ajai Chowdhry, chairman of industry body Epic Foundation and cofounder of HCL, said that domestic R&D investment “has long been a concern, remaining significantly lower than 2-5% invested by nations like the US, Japan, and China." The Centre said it will seek to boost the ratio of expenditure on R&D to India's total economic output—which fell to 0.64% in FY21, from 0.83% in FY10, echoing Chowdhry.
"The private sector's contribution has been particularly limited. The government's approval of the RDI scheme is to encourage the private sector to pick up strategic areas, and create products for both India and the global market. This fund will also enable translational research by the private sector. We need belief in our own capabilities, invest in secure and indigenous infrastructure, and become a product nation by leading with conviction, not dependency. The R&D fund will play a pivotal role in realizing this vision," he added.
Also Read | Man fakes employment after layoff, gets job offer with ‘higher salary'
Ashok Chandak, president of fellow industry body India Electronics and Semiconductor Association, added that the fund can boost “high-impact R&D opportunities in semiconductors, electronics systems, and embedded technologies—enabling the creation of robust pipelines for product commercialization and deep-tech venture growth."
The scheme, and its ？1-trillion outlay, will be governed broadly by the Anusandhan National Research Foundation (ANRF), chaired by Prime Minister Narendra Modi.
“The RDI scheme will have a two-tiered funding mechanism. At the first level, there will be a special purpose fund (SPF) established within the ANRF, which will act as the custodian of funds. From the SPF funds shall be allocated to a variety of second-level fund managers. This will be mainly in the form of long-term concessional loans," the statement added.
Sports policy
Vaishnaw said the new sports policy that Union cleared on Tuesday is aimed at elevating India to the top five rankings of all sporting nations. The policy will focus on scouting and nurturing talent, attracting international sports events to India, promoting sports manufacturing, and making sports a key part of the national education policy.
“There will also be leagues for different sports created under the policy, to make Indian sportspersons competitive," said Vaishnaw.
The furious debate over whether U.S. strikes obliterated Iran’s nuclear program or only delayed its progress toward being able to build a nuclear weapon by a few months skips over a key component in the equation: Iran’s political calculation.
If Iran were to make the decision to build a nuclear weapon, it would be betting that it can complete the job and establish deterrence before the U.S. and Israel intervene—through military action, economic pressure or diplomacy—to stop it.
A longer timeline increases the risk of being spotted or struck again, which could dissuade Iran from taking such a gamble in the first place. So measured on the Iranian nuclear clock, a delay of a few months could translate into a lot longer than it sounds if it keeps Tehran from moving ahead.
“If they start their breakout effort, and it takes them three more months, that’s a lot of time to respond. It gives you time to detect it. It gives you time to mount a response," said Michael Singh, managing director at the Washington Institute for Near East Policy and a former senior official at the National Security Council. “It’s not nothing."
The 2015 international nuclear deal negotiated by the Obama administration, which granted Iran sanctions relief in exchange for limits on its nuclear program, was designed to keep Iran a year away from being able to produce enough fissile material for a nuclear weapon.
President Trump pulled the U.S. out of that agreement in his first term. Iran scaled up its nuclear work a year later and by May this year, it was producing enough fissile material for a nuclear weapon every month.
Before the war, the general assumption was it would take Iran a few months to make a crude weapon as powerful as the bomb dropped on Hiroshima and deliverable by truck or ship, and one to three years to make a warhead that could be fit atop a missile.
Some analysts are concerned thatthe attacks by Israel and the U.S. may have convinced hard-liners in Tehran that the only way to preserve the regime is to make a run at developing nuclear weapons.
“If Iran decides to weaponize, it will take more time than it would have otherwise," said Alan Eyre, a former State Department official and member of the U.S. negotiating team under the Obama administration that worked on the 2015 nuclear deal with Iran. “But, paradoxically, we might have strengthened their resolve to seek a nuclear weapon now."
“They’re going to be figuring out how to reconstitute some sort of defensive strategy, or at least create a new one, because the one they had doesn’t work anymore," he said.
Nuclear experts and U.S. officials say Iran could have stashed away enough centrifuges and material to race for a bomb. Rafael Grossi, head of the International Atomic Energy Agency, in an interview with CBS’s “Face the Nation" on Sunday, said Iran has the industrial and technological wherewithal to resume enriching uranium in a few months.
U.N. atomic energy agency chief Rafael Grossi said Iran can resume enriching uranium in a few months if it wants.
“The capacities they have are there," Grossi said. “They can have, you know, in a matter of months, I would say, a few cascades of centrifuges spinning and producing enriched uranium, or less than that. But as I said, frankly speaking, one cannot claim that everything has disappeared and there is nothing there."
Grossi’s agency is responsible for inspecting Iran’s nuclear sites but hasn’t been able to visit the sites since the Israeli strikes on Iran began June 13.
Iran’s options now include trying to reconstitute a covert nuclear program and produce a bomb as fast as possible. A second option would be to agree to a diplomatic path that limits their ability to build a weapon by ending its enrichment of uranium, which the Trump administration has pushed.
Iran could also try to split the difference: engage in nuclear diplomacy while quietly advancing its nuclear program. That would mean working in secret at sites hidden from international inspectors, which would make the task more cumbersome.
Trump and his administration say the U.S. airstrikes using 14 30,000-pound bombs and a salvo of cruise missiles have destroyed the facilities at Fordow, Natanz and Isfahan. If so, Iran would need new, hidden enrichment sites, as well as facilities to turn enriched uranium into metal for a bomb core and manage a covert program that can get nuclear scientists to the site without being spotted.
“Iran will never obtain a nuclear bomb, because Operation Midnight Hammer obliterated their nuclear capabilities," White House deputy press secretary Anna Kelly said when asked about Iran’s prospects for rebuilding its nuclear program.
Iran has worked for decades on know-how relevant to developing nuclear weapons and has mastered most of the aspects of building a bomb, according to the IAEA and Iranian and Israeli officials.
The Trump administration says it destroyed Iran’s nuclear facilities at Fordow.
Before the war, Iran had amassed a large stockpile of highly enriched uranium large enough for 10 nuclear bombs if further enriched. It would have taken about a week to convert enough of the 60% material into 90% weapons-grade enriched uranium for one nuclear weapon, according to the IAEA.
Iran had also tested out many of the components needed to build a bomb and kept that knowledge alive for a new generation of scientists through experiments and studies ostensibly designed for peaceful purposes.
The fate of the fissile material stockpile and how many centrifuges Iran still has remain unclear. Some may have been moved from Iran’s nuclear sites before the U.S. attack.
The IAEA’s inspectors lost the ability to track Iran’s manufacturing of centrifuges due to restrictions Iran imposed in response to Trump’s withdrawal from the 2015 deal.
Inspectors have also spent six years seeking the whereabouts of a vast array of equipment from Iran’s decades-old nuclear weapons program that Tehran dispersed in 2018. It could include lines for making uranium metal and equipment for testing high explosives and other key equipment for making a bomb.
Iran’s pre-2003 nuclear program aimed to produce a small arsenal of nuclear weapons deliverable by missile. Experts believe Iran has yet to seriously work on miniaturizing a nuclear weapon and integrating it onto a missile, which could take one to three years.
“This process of actually making a warhead is not just a physical process. It also comes down to the engineering," the Washington Institute’s Singh said. “There’s a little bit more art, rather than just science, to that part of it."
The office of the U.S. Director of National Intelligence assessed in March that Iranian Supreme Leader Ayatollah Ali Khamenei hadn’t reauthorized the program to develop a nuclear weapon he suspended in 2003.
What Khamenei decides in the wake of the attacks is now the biggest consideration in any timeline.
“We don’t know if that is an actively running clock," said Eric Brewer, a deputy vice president at the Nuclear Threat Initiative and a former senior official at the White House National Security Council and National Intelligence Council. “These timelines are in some ways evolving, and they depend upon what choices Iran makes next."
Write to Jared Malsin at jared.malsin@wsj.com and Laurence Norman at laurence.norman@wsj.com
CINCINNATI—The first wave of immigrants to arrive in this hilltop neighborhood perched above the Ohio River were Germans who opened taverns, Catholic churches and schools.
More than 150 years later, immigrants from Guatemala are remaking East Price Hill, replacing empty storefronts on Warsaw Avenue, the main thoroughfare, with barbershops, taquerias and supermercados.
“We wouldn’t have a local economy if not for them holding it up," said Ashley Feist, commercial-real-estate director at Price Hill Will, a local nonprofit.
The public clash over the Trump administration’s sweeping deportations has centered on the economic and social fallout in big, Democratic-run cities such as Los Angeles and Chicago, where President Trump has promised to focus his enforcement efforts. Yet deportations are also hitting less prominent places: smaller cities and neighborhoods across the Rust Belt, where economists say recent immigration has helped boost faltering economies and offset long-running population declines.
Over the past decade, immigrants, largely from Latin America, have moved into depressed, working-class urban neighborhoods in cities across the U.S., drawn by low rents and proximity to jobs. In recent weeks, cities including St. Louis, Pittsburgh and Buffalo, N.Y., were hit by immigration raids.
In Cincinnati, federal agents on May 31 showed up in the neighborhood and arrested four people, Department of Homeland Security Assistant Secretary Tricia McLaughlin said in a statement. She said all four were in the U.S. illegally, including two who had public-intoxication and driving under the influence charges on their records. At least two people were arrested outside the Kroger supermarket on Warsaw Avenue, eyewitnesses said.
View Full Image
Businesses in East Price Hill, including a small grocery store run by Guatemalan immigrants, have seen a drop-off in shoppers since recent ICE arrests in the community.
The arrests cast a shadow over the local economy. Restaurant tables emptied. Kitchen workers stayed home. Fruit vendors disappeared from the streets. The number of shoppers at stores shrank, and those who still went didn’t linger for long.
Federico Ventura, whose Guatemalan immigrant family runs a small grocery store in East Price Hill, said shoppers were slow to return. “They think any truck with tinted windows is ICE," he said.
When Ventura’s parents opened the store in the early 2000s, the neighborhood had few Latino residents, and its population was shrinking as middle-class families moved to the suburbs.
The foreclosure crisis that began in 2006 hit particularly hard. Many of the neighborhood’s stately old homes fell into disrepair and some were torn down, leaving the area pockmarked with empty lots. The remaining residents complained about rising crime. Out-of-state investors bought up hundreds of foreclosed houses and turned them into rentals.
Over the past decade, Latin American immigrants, many from Guatemala, helped temper East Price Hill’s economic decline. They came because of cheap housing, the neighborhood’s location near jobs in downtown Cincinnati and because some Guatemalans already lived in the area.
View Full Image
Federico Ventura’s parents opened the small grocery store in East Price Hill in the early 2000s, when the neighborhood had few Latino residents.
Between 2010 and 2020, East Price Hill added close to 2,000 Hispanic residents, which helped keep the population nearly steady at around 15,000 as others departed, according to Census Bureau figures. That influx has accelerated since 2020, locals say. As older shops and restaurants closed, immigrants opened new ones, keeping Warsaw Avenue lively. The newcomers also filled crumbling apartment complexes, propping up the local real-estate market.
Tensions have flared along the way. The newcomers drove down apartment vacancies, contributing to rising rents that are a sore spot for longtime residents. In the 2024 presidential election, Ohio voted to elect Trump, who promised to close borders and deport immigrants. But Hamilton County, which includes Cincinnati, voted for Kamala Harris.
Barbara Rich, who works at an East Price Hill hardware store, said she feels like some immigrants haven’t become enmeshed enough in the community, including learning English. When locals staged a protest against the recent ICE arrests in early June, people driving by in a car stuck their middle fingers at the protesters, said Walter Vasquez, a neighborhood resident and missionary for a local religious organization, who witnessed the arrests at the supermarket.
Some immigrants, meanwhile, complain about crime. They also say nonimmigrant residents target them in robberies because immigrants tend to carry cash and are reluctant to approach police.
Around the Midwest, Pittsburgh’s Hispanic population roughly doubled between 2010 and 2023, according to census estimates. The number grew by 92% in Cincinnati and by 75% in Columbus, Ohio. This far outpaces Hispanic population growth throughout the U.S.
“The types of changes that have taken place in Price Hill have taken place in at least hundreds of neighborhoods in dozens of cities," said A.K. Sandoval-Strausz, a professor of history at Pennsylvania State University.
Many of these places are now sites of immigration raids. Authorities also arrested and deported a recent high-school graduate from Honduras in a different part of Cincinnati this month.
The East Price Hill arrests rattled a neighborhood where many newcomers are in the U.S. illegally but have managed to work. Immigration agents grabbed one man from Guatemala as he stopped at the supermarket on the way to a birthday party, said Vasquez, the neighborhood resident, who witnessed the arrest.
Locals are worried because immigration agents often use unmarked cars, making them hard to spot. “They might show up in a Prius," he said.
A neighborhood fruit vendor, an immigrant from Guatemala, said she used to sell 10 to 12 fruit cups a day. After the arrests that fell to one to three, and she worries about being able to pay her apartment rent.
View Full Image
A fruit vendor from Guatemala said her business took a hit after the local immigration arrests.
At the Valle Verde restaurant, business declined around 50% after the arrests, and servers only make a fraction of what they used to in tips, said the owner, another Guatemalan immigrant. When customers call for pickup for dishes such as tacos and enchiladas, they sometimes ask if immigration agents are nearby, she said.
A mattress-shop owner said he recently asked his brother in his native Mauritania for $500 to cover a utility bill because business has plummeted.
Shaundale Green, who cuts hair at an East Price Hill barbershop, said the majority of his customers are Hispanic immigrants. Business had been good, he said on a recent weekday, pointing at the sign listing prices of $30 to $40 for a cut.
But fear was keeping many clients home, eating into his income. “They ain’t going out any more," Green said.
Write to Konrad Putzier at konrad.putzier@wsj.com
While Israel and the U.S. were bombing Iran’s nuclear sites, another battlefield emerged behind the scenes: the financial infrastructure that keeps Tehran connected to the world.
Israeli authorities, and a pro-Israeli hacking group called Predatory Sparrow, targeted financial organizations that Iranians use to move money and sidestep the U.S.-led economic blockade, according to Israeli officials and other people familiar with the efforts. U.S. sanctions, imposed off-and-on for decades due to Tehran’s nuclear program and support for Islamist groups, have aimed to cut Iran off from the international financial system.
Predatory Sparrow, which operates anonymously and posts updates of its activities on X, said this past week that it crippled Iran’s state-owned Bank Sepah, which services Iran’s armed forces and helps them pay suppliers abroad, knocking out its online banking services and cash machines. Iranian state media acknowledged the damage.
The group also breached Nobitex, Iran’s largest cryptocurrency exchange, popular with locals for transferring money overseas. The hackers extracted about $100 million in funds and forced the platform to shut down, according to the exchange.
Iran’s government pulled the plug on much of the country’s online activities to prevent further attacks and keep a lid on dissent. Non-Iranian websites were blocked. Citizens were warned against using foreign phones or messaging platforms that it claimed could collect audio and location data for Israeli spies. Government officials were banned from using laptops and smartwatches.
Predatory Sparrow said the two hacks were directed against the “financial lifelines" of the Islamic Revolutionary Guard Corps, the most powerful faction of Iran’s military that also controls swaths of the economy. “Noble people of Iran! Withdraw your funds before it is too late," it tweeted.
Both targeted companies remain hobbled. Nobitex said it faced serious challenges in restoring services and was aiming to relaunch trading this coming week. Some Bank Sepah users say online they still aren’t receiving deposits.
The group didn’t say if it was acting on behalf of Israeli authorities. “The group’s sophistication, target selection and geopolitical messaging fit the profile of an Israel-aligned, state-sponsored cyber actor," said Deddy Lavid, chief executive of Cyvers, a Tel Aviv-based cybersecurity firm.
Predatory Sparrow didn’t respond to requests for comment sent to the administrator of its Telegram group.
The cyberattacks hit an economy already battered by U.S. sanctions that bar the purchase of Iran’s oil or interactions with its banks. Iran’s economy is highly dependent on a select few trading partners, notably China. Annual inflation runs above 40%, according to the World Bank. A constant flight of skilled workers has also throttled Iran’s economic growth.
Israel confirmed a cease-fire with Iran on Tuesday. But cybersecurity experts and Israeli officials expect the cyberwarfare to continue. “Israel will likely keep launching precision cyberstrikes against the regime’s power centers," said Lavid.
Officials at Israel’s National Bureau for Counter-Terror Financing said they didn’t have information on links between Predatory Sparrow and Israeli authorities. They said Israel was broadly targeting the economic infrastructure that allowed Iran to finance its military and proxies, imposing sanctions earlier this month on its central bank and other banks used by the IRGC.
The NBCTF, which is overseen by the defense ministry, plans to issue orders to exchanges outside Iran to help it seize more of Nobitex’s crypto holdings. It has identified a further $150 million in funds held by Nobitex, the officials said.
Pro-Iran cyber groups have hit back, targeting Israeli government websites with denial-of-service attacks, in which hackers aim to overwhelm computers that route internet traffic with a flood of requests, and sending phishing messages to Israelis in a bid to compromise their phones. The Israel National Cyber Directorate said Iran’s cyberattacks hadn’t caused damage in recent weeks.
Paranoia swept through the Iranian population as the attacks, both physical and cyber, mounted. “It’s better to cut [the internet] off. Israel can see everything," said Mohammad Ghorbaniyan, a Tehran-based money changer whom the U.S. sanctioned several years ago for allegedly aiding Iranian hackers, an accusation he denies.
The Bank Sepah hack last Tuesday halted payments, including salaries owed to military retirees, according to Fars News Agency, which is controlled by the IRGC. Many of its cash machines stopped working. The U.S. Treasury Department said last year that Bank Sepah, which has branches on Iranian military bases, helps Iran’s defense ministry pay foreign suppliers via a sprawling shadow-banking network.
Nobitex went offline the next day. The Tehran-based crypto exchange has processed transactions in excess of about $22 billion for users since its 2017 launch, according to blockchain research firms and the officials from Israel’s NBCTF.
“This attack had political motives to create emotional distress and damage the Iranian people’s property," Nobitex’s chief executive, Amir Rad, said in a video posted on its Telegram channel.
As in Russia and other countries cut off from international finance, cryptocurrencies, in particular dollar-pegged stablecoins such as tether, have emerged as a vital workaround in Iran, providing a medium through which users can shift money between local and foreign banks.
Nobitex’s 11 million customers use the platform to swap Iranian rials for tether, which they can convert into other traditional currencies abroad. Rad has said on his LinkedIn account that Nobitex’s goal is to allow Iranians to trade crypto despite “the shadow of sanctions."
“Nobitex has been the main option for the Iranians to skip the sanctions," said Amit Levin, a former Israeli prosecutor and ex-investigator at the Binance crypto exchange who now advises companies on financial-crime compliance.
The Islamic Revolutionary Guard Corps had also turned to Nobitex for international payments, according to the Israeli officials and blockchain researchers. Crypto analytics firm Elliptic has found that two IRGC operatives, whom the U.S. accused of conducting ransomware attacks on American companies, used Nobitex to make transfers.
Rad said he didn’t believe that the IRGC was moving money through Nobitex because he operated a transparent platform that was closely monitored.
Predatory Sparrow has been wreaking havoc on Iran since at least 2021. In earlier hacks, the group disabled gas-station payment systems across the country and triggered a fire at an Iranian steel plant.
For their operation against Nobitex, the hackers managed to obtain the keys for the exchange’s cryptocurrency wallets, which were held by key personnel within the company, said Rad.
Predatory Sparrow then “burned" the stolen $100 million by sending the tokens to other digital wallets the group itself couldn’t access. These wallets’ addresses, which are made up of long strings of numbers and letters, contained profane phrases like “F—IRGCterrorists."
Nobitex’s initial investigation into the breach indicated that Israel’s government had likely supported it, Rad said, though he declined to provide proof of his claim. He said Nobitex was a private, independent company with no affiliation to the Iranian state, including the IRGC.
Write to Angus Berwick at angus.berwick@wsj.com