EU Parliament Passes Data Act with Smart Contract Kill Switches

• The European Parliament has passed the Data Act to remove barriers obstructing access to industrial data and boost innovation.
• The act includes provisions requiring smart contracts to include kill switches and other functions for safe termination and interruption.
• Experts have expressed concerns that the legislation endangers smart contracts due to lack of clarity about who can stop or interrupt them.

European Parliament Passes Data Act

The European Parliament recently passed a comprehensive bill called the Data Act, which is intended to “boost innovation by removing barriers obstructing access to industrial data”. It contains provisions for fair sharing of data generated from connected products or services such as the Internet of Things and industrial machines.

Requirements for Smart Contracts

The act also sets out requirements for smart contracts used in this setting, including “safe termination and interruption”: it must include internal functions which can reset or instruct the contract to stop or interrupt its operation, especially when non-consensual termination or interruption should be permissible. It also grants smart contracts equal protection when compared with other forms of contract.

Concerns From Crypto Community

Members of the crypto community have raised concerns over the act’s implications for smart contracts, noting that it undermines immutability guarantees and introduces a point of failure since someone needs to govern use of such a kill switch. Furthermore, Professor Thibault Schrepel from Vrije Universiteit Amsterdam has pointed out sources of legal uncertainty in the act, particularly in regards to who can stop or interrupt a smart contract.

FTX Proves MiCA Should be Passed Fast

Officials from FTX have argued that MiCA (Markets in Crypto Assets) should be passed quickly as it would bring more clarity on laws regarding tokenized assets and digital securities across Europe. They believe that this will provide market participants with greater confidence when investing in tokens issued within their jurisdiction.


Overall, while the passage of the Data Act may encourage data sharing between parties, experts are wary of its implications on smart contracts due to its lack of clarity over who can stop or interrupt them. Thus, more work needs to be done before its full effects on crypto legal framework are understood in Europe