The US State Department has reinstated the Foreign Terrorist Organization designation for Yemen's Houthi group, signaling a commitment to countering Iran's proxies and addressing the threat posed by the Houthis. The move includes a Rewards for Justice program offering up to $15 million for information on Houthi financing. The designation will disrupt the group's access to international financial systems and limit their ability to acquire weapons and resources. It also provides a stronger legal basis for military action against the Houthis and justifies increased operations in the Red Sea and Gulf of Aden. The decision carries regional consequences and risks escalating tensions with Iran.