Ethereum wallet and blockchain provider Parity has been forced to shut down its PICOPS platform from 24 May following new EU data protection rules and guidelines.
“The EU General Data Protection Regulation (GDPR) replaces the Data Protection Directive 95/46/EC and was designed to harmonize data privacy laws across Europe, to protect and empower all EU citizens data privacy and to reshape the way organizations across the region approach data privacy,” states the EU’s GDPR portal.
However, according to MSN, the new law is causing certain problems, with LocalBitcoins disabling multiple accounts due to the new rulings. The GDPR laws are demanding, with a significant checklist of requirements, including those that relate to data processing principles and the limitation of storage. The significant challenges to blockchain mainly concern the immutability of transactions, replication, and encryption, including data processors and data controllers.
Swiss law firm PwC Legal recommends that platforms now scrutinize their blockchain-based solutions with regard to GDPR compliance to obtain a clear view of the legal risks they may encounter. It also explains why blockchain’s most significant feature; immutability, could be undermined by the new EU ruling:
“Transactions on a blockchain are immutable. It is not possible to delete information from a blockchain. This may contradict the GDPR’s right to erase / duty to delete personal data when a lawful ground for processing ceases to exist.”
Ethereum co-founder Vitalik Buterin commented on the news, calling it a sad development, particularly as PICOPS had facilitated many ICOs on the Ethereum ecosystem. Commenting on Twitter, he said, “A potentially very useful service in the Ethereum ecosystem discontinued due to GDPR issues.”
Jackson Palmer, the creator of Dogecoin, also criticized GDPR laws, despite saying that he thought it was “a step in the right direction from a data privacy perspective”.
“While I greatly respect the movement towards better data privacy and security laws, GDPR compliance is a large and unrealistic burden that small side-projects are simply under-equipped to manage (especially if being maintained by a single developer in their spare time),” commented Palmer.
Jutta Steiner, the CEO of Parity was critical of GDPR, arguing: “From a practitioner’s perspective, it sounds to me that it was drafted by trying to implement a certain perspective of how the world should be without taking into account how technology actually works.”
However, the company has commented that it will continue to work with regulators in order to ensure that the new rules don’t impact negatively on the industry. These are hard times for Parity, following its hacking last year, losing more than USD 300 millions worth of Ether.
Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom
Telegram Alerts from BitcoinNews.com at https://t.me/bconews