News Tech: Staking in cryptocurrencies has been more popular over the past several years as a result of the alluring profits offered. The Ethereum blockchain has made the switch to the Proof-of-Stake community with the Merge update. But with the debut of the Ethereum Beacon Chain last year, staking for ETH on Ethereum has already been possible.
However, the U.S. Securities and Change Fee has its sights set firmly on the cryptocurrency staking sector. SEC chairman Gary Gensler made a suggestion that securities laws might also apply to Ethereum shortly after the Ethereum Merge last week.
In a very short period of time, ETH has surpassed all other PoS cryptocurrencies to become the most widely staked digital asset. StakingRewards reports that the overall staked market cap is at $94.92 billion. With a staked price of $18.8 billion, Ethereum (ETH) is the market leader. Solana (SOL), with $12.4 billion, is next in line, while Cardano (ADA), at $10.9 billion, is in third place.
Gensler thinks that the Howey examination may be changed by PoS digital property. “From the coin’s standpoint,” he continued, “there’s one more indication that below the Howey examination, the investing public is anticipating profits based primarily on the work of others. The investor’s expectation of earnings based primarily on others’ work is one key indicator below the Howey test.
As previously mentioned, with Ethereum’s Merge upgrade, the regulatory focus on staking has increased recently. Therefore, any regulations pertaining to this will have an impact on all cryptocurrencies using the Proof-of-Stake model. Staking cryptocurrency has become popular among many crypto communities, and any SEC action could cause a significant drop in all PoS token prices.
It will be interesting to watch if the SEC takes this issue seriously and pursues regulations that will strengthen its grip over the staking crypto.