EU Parliament Votes Thursday on Extended Chat Control Rules Amid Crypto Privacy Warnings

1 hour ago 2 sources negative

Key takeaways:

  • EU chat control vote raises regulatory risk for privacy-centric tokens, potentially pressuring XMR and ZEC prices.
  • Mandatory scanning threatens wallet security for EU-based DeFi, possibly accelerating capital flight to non-EU protocols.
  • Narrow margin signals persistent political deadlock, creating long-term uncertainty for Web3 innovation in Europe.

The European Parliament is scheduled to vote on Thursday on extending the bloc’s temporary “chat control” framework until 2028. The proposal, revived through a rarely used urgent procedure, would allow online platforms to continue scanning private messages for child sexual abuse material. The move has drawn sharp criticism from privacy advocates and the cryptocurrency sector, who warn it could undermine encrypted communications and threaten digital asset security.

Parliament approved the procedural step on Tuesday by a narrow margin of 331 votes in favor, 304 against, and 11 abstentions. Pirate Party MEP Markéta Gregorová highlighted that a rejection or amendment now requires an absolute majority of 361 votes, raising the hurdle for opponents. The parliament had previously rejected a temporary extension in March after amendments narrowed the scanning scope.

The push returned after the European People’s Party backed a new attempt without the earlier amendments. EU member states had already agreed on an interim version allowing voluntary detection. If reinstated, the framework could force Web3 projects with wallet-based messaging or decentralized social features to implement content monitoring systems or restrict services in the EU.

Crypto industry concerns center on client-side scanning, which inspects content before encryption. Ethereum co-founder Vitalik Buterin argued that systemic backdoors weaken security for all users and questioned exceptions sought by some officials. The International Association for Trusted Blockchain Applications (INATBA) warned that mandatory scanning components could create attack vectors for crypto wallet seed phrases, session keys, or Multi-Party Computation shares, expose open-source developers to legal liabilities, and drive privacy technology innovation out of Europe. The paper specifically cited risks to zero-knowledge proof systems.

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