Europe introduces smart contract ‘kill switch’ – what it means for DeFi systems
European regulators are turning up the heat on crypto and blockchain regulation just like their American counterparts. The recently passed European Parliament Act has a section that seeks to implement more control over smart contracts.
Article 30 of the European Parliament Act touched on regulatory guidelines regarding smart contracts. The segment required parties offering smart contracts to offer robust controls that can prevent third-party manipulation or functional errors. While this segment seems well and good, it is the second part that might be of contention.
Section B of article 30 requires smart contract providers to incorporate control mechanisms for terminating transaction execution. In other words, the mechanism will facilitate some level of control to enable smart contract interruption or stoppage. Such features can act as a double-edged sword. For example, they may offer a third-party level of control through which regulators can dictate or oversee usage.
<p lang=«en» dir=«ltr» xml:lang=«en»>#cryptonews: The #European Parliament's passage of the EU Data Act may mandate a «kill switch» that would let smart contracts be canceled, endangering everything from #DeFi to #NFTs. Read more on ambcrypto.com
