The Daily: MSCI proposal threatens billions in Strategy outflows, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Friday! First things first, don't miss today's interview with Tether CEO Paolo Ardoino on The Starting Block, unpacking the stablecoin giant's landmark KPMG U.S. audit, from gold bars and bitcoin reserves to its $6 billion in excess equity.

In today's newsletter, Strategy and Metaplanet could face MSCI index removal, a Washington court orders Kalshi to halt most of its prediction market offerings, Payward posts $508 million in Q2 adjusted revenue, and more.

Meanwhile, Citigroup CEO Jane Fraser said she would like to see landmark cryptocurrency legislation passed into law, as stablecoin reward issues continue to simmer.

P.S. Don't forget to check out today's reader poll on MSCI later in the newsletter.

Reminder: We'll be on the ground at SALT's Blockchain Symposium in Jackson Hole Aug. 17-20, with exclusive interviews and coverage of the biggest stories shaping crypto and global finance.

Strategy, Metaplanet could face MSCI index removal under new proposal

MSCI proposed a new eligibility screen for non-operating companies that could see Strategy and Metaplanet removed from its Global Investable Market Indexes.

• According to a new consultation paper, an MSCI simulation using May 2026 data showed Strategy, Metaplanet, and uranium investment firm Yellow Cake would be deleted from the MSCI ACWI IMI under the framework, with Sharplink and two non-crypto firms placed on a watchlist.
• The screening tests whether a company holds sufficient operating assets, then evaluates them against five financial ratios if they fail.
• Strategy, with a $23.9 billion free-float market cap, was the largest company flagged in the simulation, though existing constituents would need to fail the screen for two consecutive years before removal, MSCI said.
• The latest proposal broadens MSCI's review beyond digital asset treasury companies, after it declined to exclude such firms in January, with JPMorgan previously estimating a Strategy removal could drive about $2.8 billion in passive outflows.
• MSCI is seeking feedback through Sept. 30 and expects to announce the results by Oct. 16.

Washington court orders Kalshi to halt most prediction market offerings in state

A Washington court issued a final order requiring Kalshi to stop offering event contracts on sports, elections, politics, entertainment, culture, technology and science, or "mentions" in the state, after finding it likely violated its gambling rules.

• Kalshi must geofence Washington users out of the restricted markets, by IP and residency by Aug. 19 and through a multi-source system by Sept. 2, and is barred from advertising the wagers.
• However, the order allows Kalshi to keep offering contracts tied to commodities, climate, economics, and finance, and follows a July preliminary injunction the appeals court declined to stay.
• The ruling adds to Kalshi's mounting legal battles, arriving on the same day Baltimore sued both Kalshi and Polymarket over similar illegal gambling accusations.

Kraken parent Payward posts $508 million in Q2 adjusted revenue as growth broadens beyond crypto trading

Kraken parent Payward posted Q2 adjusted revenue of $508 million, up 17% year over year, while adjusted EBITDA remained positive at $23 million despite an industry-wide drop in crypto spot volumes.

• Total platform volume fell 13% to $310 billion as the company's mix shifted toward equities and tokenized equities, though Payward said it gained spot market share for a third straight quarter.
• Funded accounts jumped 42% to 6.6 million, helped by momentum in Europe after its MiCA authorization, with asset-based and other revenue rising to 60% of the total.
• The firm kept up its acquisition spree during and after the quarter, closing deals for Bitnomial and Reap and agreeing to buy Magic Labs' wallet business, amid a pause in its IPO plans.

Norway sovereign wealth fund sees indirect bitcoin exposure hit all-time high

Norway's sovereign wealth fund saw its indirect bitcoin exposure climb to a record 11,549 BTC ($725 million) in the first half of 2026, up 21% on the period and 60% on the year, according to K33.

• Strategy dominates that exposure at nearly 86%, or 9,914 BTC, with the fund holding 1.17% of the company's shares, as of June 30, alongside smaller stakes in other companies holding bitcoin, including Metaplanet, Coinbase, Block, and Tesla.
• K33 Head of Research Vetle Lunde said it's the sixth straight period the fund's indirect bitcoin exposure has grown, though he acknowledged it likely reflects broad diversification rather than a deliberate bitcoin bet.
• The fund's latest disclosure also showed its first substantial indirect ether position through a 1.16% stake in the Tom Lee-chaired Ethereum treasury company Bitmine, worth about 67,340 ETH ($126.3 million) in exposure.

Binance to block transactions with HTX, 10 other exchanges under EU Russia sanctions

Binance said it will stop processing transactions with 16 crypto exchanges and service providers, including major exchange HTX, citing regulatory compliance.

• Some restrictions are already in place, while the remainder, including HTX, are enforced from Aug. 23, after which flagged transactions will trigger a compliance review that could freeze wallets.
• The move follows EU sanctions on HTX and many of the other named firms for allegedly helping Russia evade Ukraine-related restrictions.

Reader poll

Should index providers like MSCI kick out bitcoin-treasury companies?

YES, THEY'RE NOT REAL OPERATING FIRMS

NO, LET INVESTORS DECIDE

One click records your pick. We'll share the answer in a later edition.

Congratulations to the 44% of you in last Friday's poll who correctly guessed Strategy would not report any bitcoin buys in its weekly update!

Looking ahead to next week

• UK CPI inflation figures are out on Wednesday, alongside U.S. mortgage data and the latest FOMC meeting minutes. U.S. jobless claims numbers are scheduled for Thursday.
• Starknet, Sei, Arbitrum, ZKsync, LayerZero, and Wormhole are among the crypto projects set for token unlocks.
• Wyoming Blockchain Symposium, Coinfest Asia, and LATAM Digital Assets Conf all get underway.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.