Staking is already offshore for most CEX's.

When your validators are hyper-centralized, and the databasing they use is hyper-centralized, then records, tracking, and censorship are quite easy. The government could also get major DEX's to stop trading staking derivatives, which would decollateralize all the revolving loans used for staking. This isn't a problem most have thought much about. Nobody has to deal with the political problems of banning "crypto". They simply need to impair its liquidity, especially when 87% of shitcoin volume comes from stablecoins, and a growing amount from staking derivatives. Bad design, bad incentives, faux decentralization, and loose strings all over the government is pulling.

Capital: concentrated Energy: distributed