The Daily: US appeals court rules OFAC exceeded its authority in Tornado Cash sanctions, WalletConnect launches its first airdrop season and more

Happy Wednesday! In today’s newsletter, a U.S. appeals court rules that the Treasury exceeded its authority in sanctioning Tornado Cash, WalletConnect launches its first airdrop season, a Brazilian lawmaker introduces a bill to establish a national bitcoin reserve and more.

Meanwhile, visionary or 'financial comedy'? Market participants weigh MicroStrategy's stock premium amid its bitcoin buying spree.

Plus, Tether’s commodities liquidity pool could hit $5 billion by 2026, according to CEO Paolo Ardoino.

Let’s get started.

US appeals court says Treasury 'overstepped' authority in Tornado Cash sanctions

The Fifth Circuit Court of Appeals ruled on Tuesday that the Treasury Department’s Office of Foreign Assets Control (OFAC) ”overstepped its authority” by sanctioning crypto mixer Tornado Cash , reversing a lower district court decision.

• The court agreed with the Plaintiffs’ argument that Tornado Cash is software and declared its immutable smart contracts are not the "property" of a foreign national or entity — meaning they cannot be blocked under the International Emergency Economic Powers Act.
• The ruling also rejected OFAC’s broader definition of “any property” as its smart contracts are neither ownable nor traditional contracts or services.
• OFAC designated Tornado Cash as a sanctioned entity in August 2022, barring people in the U.S. and firms looking to operate in the U.S. from engaging in financial interactions with it, linking the platform to North Korea’s nuclear weapons program. 
• The ruling comes after Tornado Cash user Joseph Van Loon and five other plaintiffs sued the Treasury, Secretary Janet Yellen, OFAC and OFAC Director Andrea Gacki the same year.
• The decision led to an 870% surge in Tornado Cash's governance token, TORN, from around $3.60 to a high of nearly $35, though it later stabilized between $16 and $20, according to CoinGecko data.

WalletConnect launches first airdrop season with 50 million tokens allocated to community members

WalletConnect has launched its first airdrop season and eligibility checker, allocating 50 million of the total supply of 1 billion WCT tokens to over 160,000 users, including builders and contributors.

• The tokens are initially non-transferable, but users can stake them for periods ranging from one week to two years to participate in the network’s governance, with staking rewards starting on Dec. 19.
• Eligibility for the airdrop required users to create a profile, connect a wallet through the WalletConnect network, and engage in network activities before a specified cutoff date last month.
• WalletConnect claims it implemented a scoring system based on network usage, onchain activities and contributions to ensure fair token distribution.

Brazilian lawmaker proposes national bitcoin reserve to hedge economic risks

A Brazilian lawmaker has introduced a bill to create the Strategic Sovereign Bitcoin Reserve , allocating up to 5% of the nation’s $372 billion financial assets to the cryptocurrency via a phased acquisition strategy.

• The proposal aims to enhance Brazil's economic resilience against currency fluctuations and geopolitical uncertainties.
• The bill also cited El Salvador's bitcoin adoption as legal tender and the approval of spot Bitcoin ETFs in the U.S. as examples of innovative national strategies.
• Presto analysts Peter Chung and Min Jung compared Brazil's proposal to the similar Bitcoin Act 2024 that U.S. Sen. Cynthia Lummis introduced in July.
• “The nation-state race for a bitcoin ‘landgrab’ has begun,” the analysts said. “Brazil is unlikely to be the last nation heading in this direction.”

Flashbots unveils BuilderNet to combat centralization in Ethereum’s block-building

Blockchain research and infrastructure provider Flashbots has launched BuilderNet , claiming to address Ethereum's block-building centralization.

• Ethereum block builders compile transaction bundles into blocks and submit them to validators for maximal extractable value, currently dominated by a few operators controlling over 90% of blocks.
• BuilderNet introduces a collaborative multi-operator system to decentralize block building and enhance Ethereum’s censorship resistance in partnership with block builder Beaverbuild and Ethereum client provider Nethermind.
• The initiative uses trusted execution environments to ensure security, privacy and equitable distribution of MEV — the maximum potential value that can be extracted from a blockchain transaction, including arbitrage and front-running of user transactions.

Tether to end support for EURT stablecoin citing MiCA regulations, falling demand

Tether is discontinuing support for its Euro stablecoin, EURT , citing the European Union’s Markets in Crypto-Assets (MiCA) regulations and falling demand.

• New EURT issuance requests are no longer accepted, and customers holding EURT on all supported blockchains, including Ethereum, Solana and Tron, must redeem their assets by Nov. 27, 2025.
• The regulations, due to come into full force by the end of this year, impose more stringent requirements on stablecoin issuers, including capital and reserve obligations.
• In recent months, MiCA-compliant stablecoins like EURS, EURC and EURCV have overtaken EURT for market share, while Tether is shifting its focus to support new ventures, such as Quantoz Payments’ EURQ and USDQ.

In the next 24 hours

• U.S. markets are closed for Thanksgiving on Thursday.

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