EU finalizes Data Act with a kill switch for smart contracts: Law Decoded, June 27–July 3

Lawmakers in the European Union have agreed to proceed with the controversial European Data Act, despite previous objections from the crypto community. This act aims to promote the use of data resources for training algorithms and proposes updates to the EU’s rules on smart contracts, including the inclusion of a kill switch option for a safe termination. However, this provision contradicts the core principle of trust in smart contracts.

In addition, the European Commission has presented a legislative plan for a digital euro, with the goal of establishing it as a widely accepted and easily accessible form of payment. The plan highlights the importance of allowing individuals to obtain digital euros through their banks upon request, ensuring accessibility and preventing exclusion. The proposal also includes measures for free basic digital euro services, privacy protection, and offline payments.

Despite these developments, the crypto landscape in Europe also has positive news at the local level. For instance, the National Council of Slovakia has approved an amendment that reduces the personal income tax on profits from the sale of cryptocurrencies held for at least one year. The new tax rate will be 7%, a significant decrease from the current sliding scale of 19% or 25%. Additionally, profits received in cryptocurrencies up to 2,400 euros ($2,600) will be tax-exempt.

Meanwhile, Coinbase, a prominent American cryptocurrency exchange, is seeking the dismissal of a lawsuit filed against it by the United States Securities and Exchange Commission (SEC). Coinbase argues that the SEC has overstepped its legal authority in its interpretation of securities laws.

In a separate case, the U.S. District Court for the Northern District of California has ordered crypto exchange Kraken to provide account and transaction information to the Internal Revenue Service (IRS). The IRS seeks this information to determine if any Kraken users have underreported their taxes. Kraken is required to disclose details of users who engaged in transactions exceeding $20,000 within a calendar year, including their names, birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and other relevant documents.

Regarding crypto regulation, the Reserve Bank of New Zealand (RBNZ) has stated that a regulatory approach is not currently necessary. However, increased vigilance is recommended. The RBNZ is monitoring how other jurisdictions regulate cryptocurrencies before formulating its own approach. In the Chainalysis 2022 Global Crypto Adoption Index, New Zealand ranks 108th out of 146 countries.

source