Hungary is set to eliminate prison sentences for cryptocurrency trading activities following a regulatory crackdown in 2025 that significantly reduced market participation and led several major platforms to exit the country. Spokesperson Anita Kobol announced on Thursday that the government intends to reverse the previous administration’s strict measures, which imposed criminal liability on specific crypto transactions and service providers. These rules required transactions converting digital assets into fiat currency or between cryptocurrencies to obtain approval from a licensed validator, a requirement that many found cumbersome and restrictive.
The rollback comes after the European Union launched an investigation into whether Hungary’s 2025 legislation violated EU regulations, particularly the Markets in Crypto-Assets (MiCA) framework. The new government, led by the pro-European Tisza Party, which won the April 2026 elections, has been quick to distance itself from the prior regime. Innovation Minister Zoltán Tanács characterized the previous legal framework as excessive and motivated by political considerations rather than sound economic policy.
The 2025 law created two categories of offenses: abuse of crypto assets by users and unauthorized provision of exchange services. Under this framework, transactions without a compliance certificate were deemed invalid, and penalties for individuals could reach up to two years in prison. Larger transactions—those exceeding 50 million Hungarian forints (about $140,000)—carried maximum sentences of three years, while amounts over 500 million forints (approximately $1.4 million) could lead to five years of imprisonment. Service providers faced even harsher consequences, with operators failing to secure approval risking up to three years in prison, and firms handling large volumes facing up to eight years.
Industry experts had warned that these measures would stifle innovation and drive crypto activity underground. Local reports estimated that around 500,000 Hungarians were actively involved in cryptocurrency when the law took effect. Following the enforcement, platforms such as Revolut suspended their crypto services in Hungary, and other digital asset firms considered relocating to more crypto-friendly jurisdictions like Estonia or Lithuania. Trading volumes in the country also saw a sharp decline, confirming the chilling effect of the restrictions.
By repealing the criminal penalties, Hungary aims to align its regulations more closely with the EU’s MiCA framework, which emphasizes consumer protection and market integrity without resorting to criminalization. The government is expected to introduce new legislation that fosters a safer and more vibrant crypto ecosystem while ensuring compliance with broader EU standards. This move signals a significant shift in Hungary’s approach to digital assets, potentially restoring investor confidence and attracting back the businesses that left.