Collective defense mechanisms of IoT networks utilizing Artificial Intelligence (AI) are necessary to prevent, detect, and respond to evolving cyber threats. This chapter reviews existing methods and systems for the collective defense of IoT networks and analyzes their compliance with European Union (EU) regulations. We propose a novel reference architecture for the EU based on blockchain technology and Explainable Federated Learning (XFL) to build a trustworthy collective defense system for IoT networks. Security functionalities are optimally distributed across the network based on the devices’ capabilities with a new blockchain consensus mechanism and a new blockchain-based XFL method. The proposed architecture allows adapting to changing cybersecurity threats and fosters trust in AI-powered IoT cybersecurity applications, ultimately contributing to developing more secure IoT networks in the EU.