Ethereum, Solana, Cardano and BNB are the most staked cryptocurrencies in the space

  • Ethereum (ETH) currently grabs 20% of the market share of the total market capitalization of digital assets.
  • The regulatory focus on staking has intensified recently after Ethereum’s Merge upgrade.

Cryptocurrency staking has been gaining momentum over the past few years due to the attractive returns offered. With the Merge update, the Ethereum blockchain recently moved to the Proof-of-Stake network. However, the staking facility for ETH on Ethereum was already available since the launch of the Ethereum Beacon Chain last year.

In a very short time, ETH has overtaken all other PoS cryptocurrencies to become the most important digital asset in the market. According to data from StakingRewards, the total market capitalization currently stands at $94.92 billion. Ethereum (ETH) tops the charts with $18.8 billion of ETH staked. Next in line is Solana (SOL) at $12.4 billion and in third place is Cardano (ADA) at $10.9 billion.

However, the United States Securities and Exchange Commission has its eyes on the crypto-staking market. Shortly after Ethereum’s merger last week, SEC chief Gary Gensler hinted that securities laws could also apply to Ethereum.

Gensler thinks PoS digital assets could pass the Howey test. He added, “From a coin perspective…this is another clue that, according to the Howey test, the investing public anticipates profits based on the efforts of others. One of the main indicators of the Howey test is that the investor expects profits based on the efforts of others”.

President of Ava Labs – Staking could attract regulation

The SEC chief isn’t the only person who believes crypto staking could be subject to regulation. Ava Labs President John Wu recently said that “staking” is a “different construct” that doesn’t exist in traditional finance.

Speaking to Bloomberg Television earlier this week on Tuesday, John Wu said some digital currencies are likely securities. Ava Labs is the parent organization behind the popular Avalanche open-source protocol for hosting decentralized applications. During his interview, Wu added:

You kind of put the workforce to work. You post collateral to get a return. So it’s a hybrid, so maybe it should be an income for work that you’re contributing to, as opposed to a security.

As noted, the regulatory focus on staking has intensified recently after Ethereum’s Merge upgrade. Thus, any regulation in this regard will impact all cryptocurrencies operating on the Proof-of-Stake model. Cryptocurrency staking has been popular among the crypto community and any action by the SEC could also lead to a major crash of all PoS tokens.

It will be interesting to see if the SEC takes this matter seriously and pursues regulation that tightens its grip on crypto staking.

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