The European Union is increasingly wielding domain name deletions as a tool of financial enforcement—a trend sparked by the Markets in Crypto-Assets Regulation (MiCA) and now spreading across other legislative efforts such as the Financial Data Access Framework (FiDA) and the Payment Services Regulation (PSR). Originally a mechanism within consumer protection law, domain takedowns are now being applied to financial oversight with little evidence or impact assessment to justify the shift.

Domain takedown expansion: MiCA marked the first instance where EU financial supervisors were granted authority to order registrars to delete domain names of non-compliant crypto-asset providers. Subsequent proposals followed suit, embedding domain-level sanctions into broader regulatory aims such as consumer data protection and fraud prevention. Yet these measures have bypassed rigorous scrutiny and, in some cases, were added hastily during late-stage negotiations.

Lack of due diligence: Unlike the Consumer Protection Cooperation (CPC) framework—which included domain takedown powers only after extensive pre-legislative analysis—financial laws like FiDA and PSR have lacked such procedural due diligence. The resulting legal overlap risks confusion. Payments, for instance, already fall within the CPC’s remit, making parallel provisions in PSR redundant.

Moreover, domain deletion is a blunt instrument. Disabling a website can abruptly sever access to critical services, from online banking to customer support, impacting consumers more than wrongdoers. It also fails to mitigate core risks such as data leaks or fraud, offering no redress for affected individuals.

Critics argue that this convergence of consumer protection and financial supervision blurs institutional responsibilities. Instead of expanding enforcement powers, a more prudent approach would be to enhance existing consumer protection mechanisms. As it stands, the EU’s reliance on domain takedowns risks regulatory overreach—solving a digital problem with a digital hammer.