EU finalizes Data Act with a kill switch for smart contracts: Law Decoded, June 27–July 3
European Union (EU) lawmakers have agreed to move ahead with the controversial European Data Act, which has previously drawn criticism from the crypto community. The act, aimed at encouraging greater use of data resources to train algorithms, would update the EU’s rules on smart contracts to include a kill switch option that would allow them to be safely terminated. Obviously, this contradicts the fundamental idea of trust in smart contracts.
Meanwhile, the European Commission proposed a legislative plan for a digital euro, aiming to make it a widely accepted and easily accessible form of payment. The announcement emphasized that allowing individuals to obtain digital euros through their banks upon request ensures easy accessibility and prevents citizens from being left behind. The proposal also includes provisions for free basic digital euro services, privacy protection and offline payments.
But it’s not all doom and gloom for crypto in the old continent, especially at local levels. For example, the National Council of Slovakia approved an amendment that will reduce personal income tax on profits gained from the sale of cryptocurrencies held by the user for at least one year. The taxes will be lowered to 7%, which is a significant decrease from the current taxation sliding scale of either 19% or 25%. Payments received in cryptocurrencies up to 2,400 euros ($2,600) will not be taxed.
Coinbase seeks dismissal of SEC suit, claims extraordinary abuse of process
In the ongoing legal battle between Coinbase and the United States Securities and Exchange Commission (SEC), the American cryptocurrency exchange has filed a motion to dismiss the SEC’s complaint. In a legal document filed with the United States District Court for the Southern District of New York, Coinbase raised concerns about the SEC’s interpretation of securities laws, suggesting the agency reached beyond its legal authority.
The motion to dismiss argues that even if all the allegations in the lawsuit are true, the plaintiff does not have a valid legal claim. Coinbase’s legal team stated in the filing: “Even if the SEC were correct that the assets and services it identifies are within the scope of its existing regulatory authority, this [legal] action must be dismissed on independent grounds that it violates Coinbase’s due process rights and constitutes an extraordinary abuse of process.”
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Kraken ordered by court to disclose user data to IRS
The U.S. District Court for the Northern District of California has ordered crypto exchange Kraken to turn over account and transaction information to the Internal Revenue Service (IRS). The agency said it needed the information to determine if any of the exchange’s users had underreported their taxes. Kraken is required to provide details of users who engaged in transactions exceeding $20,000 within a calendar year, including names (real or pseudonyms), birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses and various other documents.
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Crypto ‘regulatory approach isn’t needed now’ in New Zealand
Ian Woolford, the Reserve Bank of New Zealand’s (RBNZ) director of money and cash, stated that “a regulatory approach isn’t needed right now,” though increased vigilance is. Accompanying Woolford’s statement was a summary of 50 stakeholder submissions to an earlier RBNZ paper discussing crypto and decentralized finance. The RBNZ is seemingly waiting to see how other jurisdictions will regulate crypto before it makes its own moves. Meanwhile, the country holds 108th place out of 146 in the Chainalysis 2022 Global Crypto Adoption Index.
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