Europe Introduces A Crypto “Kill Switch”, But Will It Succeed?
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February 25, 2024 1:57 pm
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Europe has included what the crypto community is calling a crypto ‘kill switch’ buried deep within Europe’s Data Act.
According to sources, smart contracts, which are normally immutable, must now contain an override mechanism to terminate the contract for whatever reason.
The troubling provision is laid out in Article 30 of the Data Act, Daily Hodl provided the exact text from Article 30:
“Safe termination and interruption – ensure that a mechanism exists to terminate the continued execution of transactions. The smart contract shall include internal functions which can reset or instruct the contract to stop or interrupt the operation to avoid future (accidental) executions.”
Needless to say, this would completely disrupt crypto smart contracts, as a central feature of this fintech is the immutability of the contracts and the ledgers upon which they are built.
Moreover, many blockchains and smart contracts don’t even support this function, so it would be difficult to see how European authorities could enforce these provisions.
Analysts are even saying that this will further drive out the cryptocurrency industry from Europe. Here’s what is currently being reported:
The Data Act is part of the European Commission’s wider data strategy aimed at making Europe a global leader in the data-agile economy.
In simple terms, the Data Act proposes new rules on who can access and use data generated in the EU across all economic sectors.
— Cointelegraph (@Cointelegraph) August 23, 2023
🇪🇺 Europe’s Crypto Kill Switch Has Arrived ⛔️
Europe’s Data Act in January 2024 went into force, and the legislation has far-reaching requirements that could force smart contract developers to comply with strict requirements – such as…👇👇👇https://t.co/nFGrAoGka0 pic.twitter.com/4asPsQTUEn
— Gutsul Crypto News (@GutsulCrypto) February 25, 2024
Axel Tom decried the provisions laid out in Europe’s Data Act: “HEX is immutable but Europe’s Data Act in January 2024 went into force, and the legislation has far-reaching requirements such as requiring the termination of a live smart contract – even in cases where the smart contract features immutability (i.e. making changes impossible.)”
$HEX is immutable but Europe’s Data Act in January 2024 went into force, and the legislation has far-reaching requirements such as requiring the termination of a live smart contract – even in cases where the smart contract features immutability (i.e. making changes impossible)🤦♂️
— Axel Tom (@an0tis) February 25, 2024
CoinDesk added:
Marina Markezic, a founder of the European Crypto Initiative, said it could be hard, if not impossible, for most smart contracts to meet the regulations as drafted by the parliament.
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