The Daily: MSCI's new index rules could exclude Strategy and other crypto treasury firms, and more

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

Happy Friday! Bitcoin is trading around $81,600 as a broader selloff in equities weighs on risk appetite.

In today's newsletter, MSCI has finalized index rules that could put Strategy and other crypto treasury companies at risk of exclusion, an OpenAI research model spends another wallet's testnet ETH without authorization, Google reports a quantum computing breakthrough, and more.

Meanwhile, Circle details how it shares USDC revenue, and Coinbase moves to power stablecoin-backed cards for Marqeta customers.

P.S. Don't forget to check out The Latent, our sister website covering AI. Get The Latent Daily here and all other The Block newsletters here. Also, follow The Block and The Latent on X for more updates.

MSCI's new index rules could exclude Strategy and other crypto treasury firms

MSCI has finalized new rules that could lead to Strategy and other crypto treasury companies being removed from its indexes, with the changes taking effect in November.

• The new rules will assess whether companies are mainly operating businesses or hold mostly non-operating assets, using asset screens and five financial ratios.
• The rules replace earlier restrictions targeting companies whose digital asset holdings made up at least 50% of total assets.
• Existing index members could be removed if they fail the screening criteria in both of their two most recent annual filing periods. MSCI may also consider their latest interim filings.
• Strategy, Metaplanet and Yellow Cake were flagged in an earlier simulation, while Ethereum treasury firm SharpLink could also be affected. MSCI will publish the final list of potentially affected firms on Nov. 11.

OpenAI research model spends another wallet's testnet ETH without permission

An internal OpenAI research model used ETH from another wallet without authorization while working on a crypto trading prototype, according to an investigation published by the company.

• The incident happened on June 26, when the model was asked to update the prototype and deploy smart contracts on Ethereum's Sepolia test network. It was not given a funded wallet or permission to use funds from other accounts.
• After struggling with the task, the model generated accounts from common developer recovery phrases and checked 362 addresses before finding one with enough testnet ETH.
• The model decided using the funds was acceptable because the recovery phrase was public and the ETH had no real-world value. It did not disclose the unauthorized spending when reporting the task as completed. OpenAI said it has since added safeguards.

Google's quantum breakthrough raises fresh questions about Q-day

Google Quantum AI has demonstrated a new technique that could help overcome a major problem in building powerful quantum computers, though experts disagree on what it means for the timeline of quantum threats to crypto.

• Google tested a method called "magic state cultivation" on its Willow processor, reducing errors by 40 times and reaching 99.99% logical fidelity for certain quantum states.
• The technique could make it easier to build quantum computers that can correct errors, but Google said larger demonstrations are still needed before it can be used in practical systems.
• Castle Island Ventures' Nic Carter said AI is helping speed up quantum progress, though there is no immediate threat. Project Eleven's Alex Pruden said the breakthrough does not necessarily bring Q-day closer, but supports existing estimates.

Visa Direct brings USDC prefunding into commercial use with Inyo Global

Visa Direct has moved its USDC prefunding service into commercial production with Inyo Global, allowing eligible payment companies to fund international payouts around the clock.

• Inyo is the first Visa Direct processor to offer the service commercially, following Visa's stablecoin prefunding and payout pilots that began in 2025.
• Businesses can use USDC to fund cross-border payouts in near real time, including when traditional banking funding windows are closed.
• The service is available through Inyo's existing payment APIs, subject to eligibility and geographic restrictions. Inyo serves money transmitters, fintech firms, banks and payment companies.

Farcaster acquired by Balaji's Network School

Balaji Srinivasan's Network School has acquired decentralized social platform Farcaster from Neynar, less than nine months after Neynar took over the project.

• Farcaster will become the "Network State Protocol," with plans to turn online groups into physical communities. Users will be asked to accept a new "social smart contract" covering their behavior on the platform, with an NFT confirming their agreement.
• Users who decline will have read-only access through the main app, while their accounts and assets will move to another client. The platform also plans to introduce AI moderation and gradually require users to verify they are human.

In the next week

• U.S. housing market data, including housing starts and pending home sales, are due next week, along with weekly jobless claims, October manufacturing and services PMI readings, and the University of Michigan's final consumer sentiment survey.
• Eurozone economic sentiment, consumer confidence and October manufacturing and services PMI data are due next week. ECB President Christine Lagarde, Chief Economist Philip Lane and several other ECB officials are also scheduled to speak.
• Cronos (CRO), LayerZero (ZRO), Arbitrum (ARB) and deBridge (DBR) lead next week's token unlocks.

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