Also today, El Salvador's President Nayib Bukele wants to run for re-election — but according to the constitution, he isn't allowed.
Today's headlines
But first — subscribe to our newsletter.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
Coinbase and Lido dominate staking 😒
Ethereum's new Proof-of-Stake blockchain is facing unwelcome scrutiny after it emerged that staking rewards are being dominated by a small number of centralized players. According to Gnosis co-founder Martin Köppelmann, Lido currently controls 27.5% of staking, while Coinbase is in second place on 14.5%. Overall, he claims the top seven entities control over two-thirds of block verification — a fact that he described as "pretty disappointing." Bitcoin maximalists have been up in arms about these revelations. They argue that this proves Ethereum is becoming more centralized, and censorship resistance is at risk. But Köppelmann argues things are even worse in Bitcoin, as just four entities currently receive 72% of mining rewards.
Has The Merge turned ETH into a security? 😬
Ethereum's switch to Proof-of-Stake could attract unwelcome attention from the U.S. Securities and Exchange Commission. According to The Wall Street Journal, Gary Gensler believes cryptocurrencies that operate on PoS chains may be classified as securities. While the SEC chairman stressed that he wasn't talking about any digital asset in particular, his remarks are particularly ominous given how The Merge had taken place just hours earlier. Referring to the Howey test — which courts use to assess whether assets should be classed as securities — Gensler was quoted as saying: "From the coin's perspective… that's another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others."
Nayib Bukele is seeking re-election 👀
El Salvador's President Nayib Bukele has announced that he's planning to run for re-election. This is despite the fact that the country's constitution actually prevents presidents from serving consecutive terms. Bukele's current five-year tenure is set to end in 2024 — and back in 2021, the Supreme Court ruled that presidents could serve two consecutive terms. But given that the court's judges were appointed by politicians from Bukele's ruling party, this declaration drew condemnation from the U.S. and other foreign powers. Bukele has high approval ratings because of his recent clampdown on gangs, but reaction to the Bitcoin Law has been mixed. BTC could be ditched as legal tender if he isn't re-elected.
Crypto giveaway scams are surging 📈
There's been a dramatic spike in the number of fake domain names used to direct victims to crypto giveaway scams. Group-IB says these websites often house fake YouTube streams that feature the likes of Vitalik Buterin, Elon Musk and Cristiano Ronaldo. Worryingly, the number of rogue domain registrations saw an "explosive" increase of 335% in the first half of 2022 when compared with the whole of last year. Typically, fake crypto giveaway scams command 10,000 to 20,000 viewers — and Group-IB also uncovered the 10 keywords that are most commonly used by fraudsters. ETH, Ark, Elon Musk, Shiba, XRP, Tesla, SpaceX, Micro, Ripple and ADA top the list, and experts say scammers pay attention to the news and adjust their tactics.
