Hungary is rolling back a restrictive crypto framework adopted under former Prime Minister Viktor Orbán. Government spokesperson Anita Kobol told Bloomberg on Thursday that the changes will decriminalize crypto trading and remove the prison sentences that pushed major platforms out.
The rollback targets legislation that began on July 1, 2025. Parliament passed rules criminalizing the use of unlicensed exchanges and certain unauthorized high value crypto transactions. The thresholds were not vague. Individuals tied to transactions between 50 million Hungarian forints (roughly $162,000) and 500 million forints (roughly $1.62 million) faced prison terms of up to two or five years, depending on the transaction value.
Service providers were also in the blast radius. Bloomberg reports that operators without a central bank license faced sentences of up to eight years. The framework also required approved validation for both crypto to fiat and crypto to crypto conversions. That compliance overhead hit real business operations. Bitcoin Magazine notes that platforms including Revolut suspended crypto services in Hungary, and that the EU opened an inquiry over whether the restrictions complied with bloc-wide regulations.
From “safeguards” to dismantling penalties
The new administration calls the prior approach politically motivated. Hungary’s Minister of Science and Technology Zoltán Tanács, according to Bloomberg, described the earlier rules as “politically motivated” rather than market safeguards, and said the government intends to scrap the penalties.
Tanács also laid out additional regulatory adjustments. The government plans to abolish criminal prosecution for market participants, revise cybersecurity rules affecting about 4,000 Hungarian businesses under the NIS2 directive, and align national law with the EU’s Markets in Crypto-Assets regulation. Tanács pointed to Estonia as a template for rebuilding Hungary’s digital regulatory environment.
The point of the pivot is commercial as well as legal. Tanács said reforms should bring international platforms back to Hungary and reduce friction for domestic operators, Bloomberg reports. The prior regime appears to have had a visible market effect. Bitcoin Magazine says local trading volumes fell as firms absorbed steep compliance costs.
Why this matters beyond one country
Hungary’s Orbán-era rules were among the strictest in the European Union. The EU’s investigation, mentioned by Bitcoin Magazine, put Hungary out of step with MiCA, the bloc standard that governs crypto activity across all 27 member states.
If Hungary follows through on MiCA alignment, it reduces a key uncertainty for operators that want a single compliance story across the EU. MiCA changes also matter for how platforms assess risk, because punitive regimes tied to specific transaction characteristics create a different kind of legal exposure than harmonized market conduct rules.
A wider reset in regulatory tone
Hungary is not moving alone. The story points to a broader pattern of governments softening or reconsidering punitive crypto policies. In April, Bitcoin Magazine notes, Pakistan’s central bank lifted an eight-year ban on cryptocurrency operations as part of a move toward regulatory openness.
Taken together, the article frames both shifts as pressure against unilateral restrictions, especially as institutional participation grows and cross-border coordination under frameworks like MiCA becomes more practical.
Bitcoin Magazine reports that Hungary has not announced a timeline for when the legislative changes will take effect. For now, the key variable is process. Until the new legal text lands, market participants in Hungary still face the uncertainty of how quickly the prior criminal framework will be removed in practice.
Key facts from the reported U-turn
| Item | What the July 1, 2025 rules did | What the government now plans |
|---|---|---|
| Criminalization | Criminal penalties for using unlicensed exchanges and certain unauthorized high value transactions | Decriminalize crypto trading and remove prison sentences |
| Transaction thresholds | 50M to 500M HUF transactions tied to prison terms of up to 2 or 5 years depending on value | Abolish criminal prosecution for market participants |
| Service providers | Up to 8 years for providers operating without a central bank license | Roll back penalties and revise related rules |
| Conversion validation | Approved validation required for crypto to fiat and crypto to crypto conversions | Not specified in detail, but national law to align with MiCA |
| EU fallout | EU probe into whether restrictions complied with bloc rules | Align national law with MiCA |