Hungary will roll back its stringent crypto trading regulations introduced recently, which imposed potential jail sentences for unauthorized crypto transactions. The government acknowledged these rules had stifled the market and prompted some platforms to exit the country.
The controversial framework, enacted in 2025, required all crypto-to-fiat and crypto-to-crypto trades to receive prior approval via compliance certificates from licensed validation service providers. Transactions without this certification were considered illegal, exposing traders and service providers to criminal prosecution.
This regulatory regime forced digital asset platforms like Revolut to suspend their crypto offerings in Hungary. Officials also said the rules triggered a European Union investigation on whether Hungary’s approach aligned with bloc-wide financial regulations. The decriminalization aims to reverse these impacts and support a healthier domestic crypto market.
The 2025 amendments amended Hungary’s Criminal Code and a specific crypto market law, generally called the Crypto Act. Under the previous system, unauthorized crypto deals could lead to prison terms ranging from two to eight years, depending on the transaction amount. These penalties applied to individual and institutional actors operating without certification from the Supervisory Authority of Regulated Activities.
Validation providers, a new regulatory category created by the law, were mandated to verify the origin of crypto assets, ownership of wallets, user identities, and transaction legitimacy before issuing compliance certificates. The goal was to tighten oversight but inadvertently created barriers that many market participants found unworkable.
By eliminating these criminal sanctions and the approval bottleneck, Hungary seeks to increase legal certainty for crypto investors and service operators. The government emphasized that the initial legislation had an adverse effect on several hundred thousand users and disrupted the ongoing development of the local crypto ecosystem.