GDPR and Blockchain Integration

🇪🇺🚨European Data Protection Board has just published its Guidelines 02/2025, tackling the interplay between #blockchain technologies and the #GDPR. With blockchain’s promise of transparency and integrity comes a complex web of privacy implications—particularly when personal data is processed on immutable, distributed ledgers. These guidelines offer a much-needed roadmap for data privacy professionals navigating this evolving terrain. ⛓️The EDPB emphasises that blockchain’s decentralisation does not negate the need for GDPR compliance. Controllers must justify their choice of blockchain architecture and assess whether its use is necessary, proportionate, and aligned with data protection principles. Permissioned blockchains, which offer more transparent governance and access control, are strongly encouraged. Where public or permissionless blockchains are used, the rationale must be well-founded and documented, and the DPIA becomes indispensable. ⛓️The guidelines call for a rigorous allocation of roles and responsibilities. Blockchain ecosystems involve diverse actors—nodes, miners, users, and developers—whose legal qualifications under the GDPR depend on the governance model and their influence over the processing. Controllers cannot evade accountability by pointing to the system’s technical decentralisation. Instead, they must ensure that the roles are clearly defined, mainly when joint controllership arises. ⛓️Data protection by design and by default is a central theme. Controllers are urged to minimise the processing of personal data, avoid storing it directly on-chain, and use off-chain storage whenever possible. Even when hashing or encryption is used, the EDPB warns that these do not automatically render data anonymous. If identification remains possible using reasonably likely means, GDPR applies in full. ⛓️A cornerstone of the guidelines is the protection of data subject rights. The immutable nature of blockchain creates real friction with the rights to rectification and erasure. These must be addressed during the design phase—not retroactively. Where personal data is stored on-chain, controllers must be able to render it anonymous or unlinkable in response to such requests. This can involve erasing related off-chain data or deploying architectures that enable effective de-identification. The EDPB suggests avoiding the registration of identifiable clear text, even if encrypted or hashed, directly on-chain. ⛓️The right to object is equally vital. If a data subject invokes their right to object, especially to processing based on legitimate interests, controllers must be able to cease the processing or offer effective alternatives. In blockchain contexts, this may require complex governance and technical solutions. The #EDPB notes that in many cases, the inability to comply with this right may indicate that blockchain is not an appropriate solution in the first place. #rodo #privacy

𝗖𝗮𝗻 𝗚𝗗𝗣𝗥 𝗮𝗻𝗱 𝗕𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝘄𝗼𝗿𝗸 𝘁𝗼𝗴𝗲𝘁𝗵𝗲𝗿? 7 𝗞𝗲𝘆 𝗹𝗲𝗴𝗮𝗹 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝘀𝘄𝗲𝗿𝗲𝗱 (𝗘𝗗𝗣𝗕 02/2025 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 𝗜𝗻𝘀𝗶𝗱𝗲) New expert report by Varteni Kasapian (Partner, Data Protection Expert) and Ioanna Patsalidou (Associate, PhD Candidate at King’s College London) Published by: Christos Patsalides LLC Blockchain brings transparency, decentralisation, and innovation. But it also clashes with Europe’s strict data protection law, the GDPR. This new legal report explores how these two forces can coexist, and what blockchain developers and businesses must do now to stay compliant. 𝗪𝗵𝗮𝘁 𝗿𝗲𝗮𝗱𝗲𝗿𝘀 𝘄𝗶𝗹𝗹 𝗹𝗲𝗮𝗿𝗻: ·      7 major legal tensions between GDPR and blockchain ·      Practical guidance from the EDPB 02/2025 Guidelines ·      Compliance checklists and steps for smart contract systems and DAOs 𝗞𝗲𝘆 𝗹𝗲𝘀𝘀𝗼𝗻𝘀 𝗹𝗲𝗮𝗿𝗻𝗲𝗱: 1.    𝗜𝗺𝗺𝘂𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝘃𝘀. 𝗥𝗶𝗴𝗵𝘁 𝘁𝗼 𝗯𝗲 𝗙𝗼𝗿𝗴𝗼𝘁𝘁𝗲𝗻: Blockchain can’t delete data, but GDPR requires it. 2.    𝗗𝗮𝘁𝗮 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝗹𝗲𝗿 𝗗𝗶𝗹𝗲𝗺𝗺𝗮: Identifying legal responsibility is challenging in decentralised systems. 3.    𝗟𝗮𝘄𝗳𝘂𝗹 𝗕𝗮𝘀𝗶𝘀 𝗜𝘀𝘀𝘂𝗲𝘀: Consent alone is not enough; other legal bases must be evaluated. 4.    𝗗𝗮𝘁𝗮 𝗠𝗶𝗻𝗶𝗺𝗶𝘀𝗮𝘁𝗶𝗼𝗻: Store less on-chain. Off-chain alternatives and pseudonymisation are crucial. 5.    𝗖𝗿𝗼𝘀𝘀-𝗕𝗼𝗿𝗱𝗲𝗿 𝗥𝗶𝘀𝗸𝘀: Decentralised storage triggers GDPR compliance gaps in international transfers. 6.    𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗲𝗱 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 & 𝗦𝗺𝗮𝗿𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀: Human oversight must be integrated to meet Article 22. 7.    𝗡𝗲𝘄 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 02/2025: The EDPB provides clear legal and technical steps for responsible innovation. 𝗔𝗰𝘁𝗶𝗼𝗻𝗮𝗯𝗹𝗲 𝘀𝘁𝗲𝗽𝘀 𝗳𝗼𝗿 𝗯𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀: ·      Conduct Compliance Readiness Assessments ·      Implement Privacy by Design and Default ·      Explore off-chain data storage wherever possible ·      Engage with regulators and public consultations ·      Perform Data Protection Impact Assessments (DPIAs) when personal data is involved 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻: GDPR and blockchain don’t have to be at odds. With thoughtful architecture and compliance planning, businesses can protect users and embrace innovation. 𝗡𝗼𝘄 𝗼𝘃𝗲𝗿 𝘁𝗼 𝘆𝗼𝘂: ·      Should decentralised systems adapt to GDPR, or should regulation evolve? ·      How can we assign accountability without central authorities? ·      Would you trust a blockchain system with your personal data? Let’s open the conversation. The future of trust in Web3 may depend on how we answer these questions. Maurizio Di Vito Bob Mastrolilli Renaud LE SQUEREN Vitaly Bondar Karolis Juskys Nemanja Škarin Simon Schmitz, ACCA Giulia Calloni Alexandre Gallez Lorenzo Montini-Maring Stefano Cafiero Massimiliano Gozzi Barbara Azoulay Bato Kikic Ruiqi Tan

European Data Protection Board: Guidelines 02/2025 on processing of personal data through #blockchain technologies These guidelines provide a framework for organizations considering the use of blockchain technology, outlining key GDPR compliance considerations for planned processing activities. They provide an overview of the fundamental principles of blockchain technology, assessing the different possible architectures and their implications for the processing of personal data. Furthermore, they clarify that roles and responsibilities of different actors in a blockchain related processing need to be assessed during the design of a processing and what elements need to be considered in this respect. Depending on the purpose of processing for which blockchain technology is used, different categories of personal data may be processed. The guidelines highlight the need for Data Protection by Design and by Default and adequate organisational and technical measures. They also provide examples of different techniques for data minimisation and for handling and storing personal data. As a general rule, storing personal data on a blockchain should be avoided, if this conflicts with data protection principles. To assist with the compliance with data protection principles, one of several available advanced techniques, appropriate organisational measures and appropriate data protection policies should be used when considering storage of personal data on-chain. The guidelines detail technical aspects and different ways of implementation for such techniques, highlighting their strengths and weaknesses in order to help organizations on choosing appropriate measures. Additionally, the guidelines discuss the interplay between the technical aspects of blockchain and the data protection principles of Article 5 GDPR. They emphasize the importance of the rights of data subjects especially regarding transparency, rectification and erasure. The guidelines also highlight the importance of carrying out a Data Protection Impact Assessment (DPIA) prior to implementing a processing using blockchain technology and provide key aspects to be considered in a structured way when conducting a DPIA. Finally, in Annex A the guidelines provide a set of concise recommendations for organizations planning to set up a blockchain based processing.