Hungary to scrap crypto trading penalties after 2025 crackdown

This article was updated with video coverage of a recent press conference and additional information regarding the previous legislation.

Hungary has moved to remove prison penalties tied to cryptocurrency trading after restrictions introduced in 2025 led to a slump in trading activity and prompted several platforms to scale back services in the country.

Government spokeswoman Anita Kobol told reporters on Thursday that Hungary plans to reverse measures adopted under former Prime Minister Viktor Orbán’s administration, which imposed criminal liability on certain crypto-related transactions and service providers.

The restrictions required approved validation for transactions converting cryptocurrency into traditional currency and for crypto-to-crypto exchanges. 

According to Kobol, the European Union has opened an investigation into whether those rules complied with bloc regulations.

The rollback follows Hungary’s April 2026 parliamentary election, which brought the pro-European Tisza Party to power. Subsequently, newly appointed Minister of Innovation and Technology Zoltán Tanács described the previous framework as “excessive and politically driven.”

The election ended the 16-year rule of former Prime Minister Viktor Orbán. Peter Magyar’s Tisza Party formed the new government after campaigning on closer engagement with European institutions and a different approach to several policies introduced by the previous administration.

Rules that reshaped Hungary’s crypto market

Legislation introduced in 2025 created two offenses around abuse of crypto assets by users and the provision of unauthorized crypto asset exchange services by operators.

Under the framework, every crypto-to-fiat and crypto-to-crypto transaction required a compliance certificate from a licensed local validator. Transactions completed without that certificate were considered legally invalid.

Amendments to Hungary’s Criminal Code and Act VII of 2024 on the crypto market, known as the Crypto Act, formed the legal basis for the restrictions. The framework also created a new category of authorized entity known as a crypto conversion validation service provider, which required approval from Hungary’s Supervisory Authority of Regulated Activities.

Before issuing a compliance certificate, these providers were required to verify the origin of crypto assets, identify wallet or device ownership, assess customer profiles, and check transactions against external databases. Asset transfers linked to transactions conducted without a certificate were deemed invalid and unable to produce legal effect under the law.

A Forbes report published after the law took effect said individuals or entities exchanging crypto through unauthorized services faced up to two years in prison for transactions valued between 5 million and 50 million Hungarian forints. Penalties increased to five years for transactions between 50 million and 500 million forints, while transactions exceeding 500 million forints carried prison terms of up to eight years.

Service providers also faced criminal exposure. According to the Forbes report, operators that failed to secure approval under Hungary’s validation regime risked prison sentences of up to three years, while businesses handling particularly large crypto volumes could face penalties of up to eight years.

Industry participants warned that the measures created uncertainty for both users and companies. Local estimates cited by Forbes suggested roughly 500,000 Hungarians were involved in cryptocurrency activities when the legislation was introduced.

Market participants responded quickly after the rules came into force. Revolut suspended cryptocurrency services in Hungary, while other digital asset firms reportedly explored relocating operations to jurisdictions such as Estonia and Lithuania. Trading volumes for digital assets also declined following implementation of the restrictions.

With the criminal provisions now set to be removed, the government is seeking to bring Hungary’s approach closer to the European Union’s Markets in Crypto-Assets framework.

This is a developing story.