Hungary has begun rolling back one of the European Union’s most restrictive crypto regulatory frameworks, according to statements from government officials reported by Bloomberg. The shift follows a political transition that ended former Prime Minister Viktor Orbán’s tenure and introduced a new administration led by Péter Magyar.
Government spokesperson Anita Köböl confirmed on June 11 that the administration will dismantle rules that criminalized crypto activity and imposed prison sentences on both users and service providers. She described the previous framework as “an unnecessary piece of legislation” that “made practical operation impossible and frightened the market participants.”
The earlier regime came into force through the 2024 Crypto Act and subsequent regulatory measures. It introduced strict validation requirements and criminal penalties that reshaped Hungary’s digital asset market within months.
Criminal penalties and validation rules reshaped the market
Under the previous system, crypto transactions required a mandatory validation certificate issued by a regulator-approved entity. The requirement applied to both crypto-to-fiat and crypto-to-crypto transactions. Validators conducted enhanced due diligence, which included checks on asset origin, wallet ownership, and related parties.
Transactions without a certificate were considered legally void. The rules also introduced severe penalties tied to transaction value. Individuals who conducted transactions between 50 million and 500 million Hungarian forints, equivalent to roughly $162,000 to $1.62 million, faced prison terms of two to five years. Service providers that operated without a license from the central bank faced penalties of up to eight years.
The effect on the market was immediate. Revolut suspended its crypto services in Hungary after the rules took effect. Domestic trading activity declined as firms faced rising compliance costs and legal uncertainty. The regulatory approach also triggered an inquiry at the European Union level, as the national framework conflicted with the bloc’s unified approach to crypto regulation.
Political shift sets stage for regulatory overhaul
The policy reversal followed parliamentary elections held on April 12, 2026. Péter Magyar’s Tisza Party secured a supermajority, which ended Orbán’s 16-year period in power. Magyar assumed office in mid-May, and the new administration moved quickly to revise key regulatory positions.
Zoltán Tanács, Hungary’s Minister of Science and Technology, criticized the previous crypto framework. He described the rules as “politically motivated” rather than designed to protect the market. His remarks signaled a broader shift toward regulatory alignment with European standards.
Officials stated that the new framework will remove criminal penalties entirely. The government plans to abolish the validation certificate requirement and eliminate prison sentences for both users and service providers.
Alignment with EU rules becomes central objective
The new approach will align Hungary’s crypto regulation with the European Union’s Markets in Crypto-Assets framework. This system provides a unified licensing regime for crypto-asset service providers across all member states.
Hungary’s earlier rules had placed the country outside that framework. The validation system and criminal penalties conflicted with MiCA’s structure, which focuses on licensing and supervision rather than criminal enforcement for standard market activity.
Officials have identified Estonia as a reference model for rebuilding the regulatory environment. The government expects the changes to reduce barriers for domestic companies and create conditions for international platforms to return.
Market recovery depends on implementation timeline
The rollback has not yet been finalized through legislation, and officials have not provided a timeline for implementation. The pace of legal changes will determine how quickly platforms can resume operations and how soon trading volumes recover.
Revolut and other service providers now have a clearer path to re-enter the Hungarian market. The removal of criminal liability reduces legal risk, which had previously deterred participation.
The previous framework created one of the most restrictive environments for crypto activity within the European Union. Its removal places Hungary back within the bloc’s regulatory mainstream.
The outcome will depend on how quickly new rules replace the existing system and how effectively authorities transition toward the MiCA-aligned structure. Further legislative updates are expected in the coming weeks.
Gunel Ismayilova
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