TLDR
- Hungary moves to scrap prison terms linked to crypto trading violations
- Earlier rules targeted unlicensed exchanges and high-value transactions
- The government plans to end criminal prosecution for market participants
- Licensing restrictions previously pushed platforms like Revolut to exit
- Authorities aim to align the national framework with EU MiCA standards
Hungary has started reversing its strict crypto rules and plans to remove criminal penalties for digital asset trading. The government move follows criticism of licensing barriers that pushed exchanges out of the country. Officials also aim to align national laws with the European Union MiCA framework and reduce market restrictions.
Hungary Crypto Law Rollback and Licensing Shift
Government spokesperson Anita Kobol confirmed the policy reversal on Thursday. She said the framework introduced under former Prime Minister Viktor Orbán will be dismantled.
The previous law criminalized unlicensed crypto trading across Hungary. It also imposed prison terms for certain high-value transactions.
Transactions between 50 million and 500 million forints faced prison sentences under the earlier regime. Service providers without a central bank license risked up to eight years in prison.
Authorities required strict approval for crypto to fiat and crypto to crypto transfers. This requirement increased compliance pressure on exchanges operating in Hungary.
Revolut suspended crypto services after the rules took effect. Domestic trading volumes also dropped under the regulatory burden.
Officials now plan to remove criminal prosecution for market participants. They also intend to revise cybersecurity rules affecting thousands of firms.
The government described the earlier framework as politically driven policy. It said the new approach will restore market participation and reduce friction.
Digital Asset Rules and EU MiCA Alignment
Officials aim to bring national rules in line with EU MiCA regulation framework standards. They expect this alignment to standardize crypto oversight across member states.
The revised framework will remove criminal charges linked to unauthorized trading activity. Hungarian authorities plan to introduce clearer licensing requirements for exchanges.
Estonia has been identified as a model for regulatory restructuring for digital asset oversight reforms. Hungary studies its digital asset system to guide policy reforms.
The EU previously opened an inquiry into Hungary’s restrictive crypto rules. That inquiry examined compliance with bloc-wide financial regulations.
Platforms like Revolut exited or restricted services due to compliance costs. This reduced local liquidity and trading activity across exchanges.
Domestic firms faced increased operational expenses under the prior regime. Many providers struggled with licensing approvals and reporting obligations under strict rules.
The government has not announced a timeline for the implementation of reforms. Legislative changes will proceed through parliament before enforcement begins.
The reforms adjust Hungary’s digital asset supervision approach toward clearer operational standards for exchanges and service providers across markets. The legislative process will move through parliament before enforcement begins under updated national financial regulations in Hungary legal system.