Europarliament approves Data Act that requires kill switches on smart contracts

The European Parliament passed the Data Act on March 14. The comprehensive bill was intended to “boost innovation by removing barriers obstructing access to industrial data.” Among its provisions is an article that would require smart contracts to be alterable. 

The legislation established rules for fairly sharing data generated by “connected products or related services,” such as the Internet of Things and “industrial machines.” Eighty percent of industrial data generated is never used, the Europarliament noted in a statement, and this act would encourage greater use of those resources to train algorithms and lower prices for device repairs.

The act contains provisions to protect trade secrets and avoid unlawful data transfers and it set requirements for the smart contracts of parties offering sharable data, including “safe termination and interruption”:

“The smart contract shall include internal functions which can reset or instruct the contract to stop or interrupt the operation; […] Especially, it should be assessed under which conditions non-consensual termination or interruption should be permissible.”

The act also granted smart contracts equal protection with other forms of contract.

Experts identified a number of issues with the legislation. OpenZeppelin head of solutions architecture Michael Lewellen commented in a statement provided to Cointelegraph:

“Including a kill switch undermines immutability guarantees and introduces a point of failure since someone needs to govern the use of such a kill switch. […] Many smart contracts such as Uniswap do not have this kill switch ability.”

Related: FTX proves MiCA should be passed fast, officials tell European Parliament committee

Prof. Thibault Schrepel of the Vrije Universiteit Amsterdam said in a tweet that the act, “endangers smart contracts to an extent that no one can predict,” and pointed out sources of legal uncertainty in the act. In particular, he found that it did not specify who could stop or interrupt a smart contract.

The bill was passed by a margin of 500-23, with 110 abstentions. Parliament members will now negotiate the final form of the law with the European Council and individual member countries of the European Union.

All Dutch and English crypto news!

Coinbase stock down 25% as regulators move in and crypto environment worsens again

Key Takeaways Coinbase was issued with a Wells notice this week and now awaits formal charges from the SEC Regulators continue to move in on US crypto...

Dit is hoe je kans maakt op 62 Bitcoin (hint: zoek een goed reisbureau)

Bij BLOX houden we wel van een goede marketingstunt. Een bedrijf genaamd LunarCrush heeft plannen aangekondigd om 62 Bitcoin te verstoppen op de maan. Of...

How Montana stands to benefit if its pro-crypto mining bill is approved

The Montana Senate recently passed a bill designed to protect crypto miners operating within the state. The proposed law, which is currently making its way...

zkSync Era launches with Uniswap and Sushi — First zkEVM on mainnet

Some of the biggest names in decentralized finance, including Uniswap, Sushi, Maker and Curve, are set to launch March 24 on zero-knowledge proof roll-up zkSync...

Beste exchanges

Koop je crypto bij Bitvavo