EU Passes Controversial Smart Contract Kill Switch Rules Under Data Act

• European Union (EU) lawmakers have reached an agreement to move ahead with the controversial European Data Act.
• The act is focused on the fair use of industrial data and removing barriers to fairly sharing data generated by a range of data-centered services.
• The act has provisions for imposing altering requirements for smart contracts, including kill switches that allow them to be safely terminated.

European Union Moves Ahead with New Data Act

The European Union (EU) has finalized its controversial rules under the Data Act, which will give new regulations around smart contracts and other digital transactions. This was confirmed by EU Commissioner for Internal Markets Thierry Breton in a tweet calling it a “milestone in reshaping the digital space”.

Data Act Aimed at Fair Use of Industrial Data

The Data Act was first proposed in early 2022 and passed by the European Parliament on March 14th. It is focused on providing fair use of industrial data and removing barriers to fairly sharing data generated by various services such as the Internet of Things. It also aims to reduce costs of services through training algorithms using these datasets.

Controversy Around Smart Contract Regulations

However, this law drew criticism from the crypto community due to its proposals around smart contracts and vagueness around them. This is because it establishes rules for parties providing sharable data, including “safe termination and interruption” while incorporating safeguards such as preventing illicit data transfers or preserving trade secrets. This could potentially restrict innovation in terms of smart contracts or make it difficult for developers in crypto industry to comply with them due EU-wide regulations within a broader strategy on data markets .

Safe Termination & Interruption Requirements Established

The act requires that parties providing sharable data must abide by certain conditions such as safe termination or interruption when necessary while also preserving trade secrets and preventing illicit transfers of information. It also establishes rules around resetting possibilities so that transactions can be terminated or interrupted if required according to these conditions set out under the act .


In conclusion, the new EU legislation focuses on establishing rules around smart contract regulations which aim at protecting both consumers and providers alike while promoting fair use of industrial data across Europe in line with its broader strategy on digital markets .