Hungary is set to abolish its controversial cryptocurrency regulations introduced under former Prime Minister Viktor Orbán, a move that would remove criminal penalties for crypto trading and eliminate rules that threatened both investors and service providers with prison sentences.
According to government spokesperson Anita Kobol, the government is preparing to dismantle the restrictive framework that has weighed heavily on Hungary's crypto industry since mid-2025. The reversal marks one of the country's biggest policy shifts toward digital assets and could help revive trading activity that sharply declined after the original legislation took effect.
Strict Crypto Rules Triggered Market Disruption
The controversial regulations came into force on July 1, 2025, after Hungary's parliament approved legislation requiring government-approved validation for crypto-to-fiat and crypto-to-crypto transactions.
The rules quickly disrupted the local crypto ecosystem, forcing several major platforms, including Revolut, to suspend cryptocurrency services for Hungarian users while they assessed regulatory compliance.
The legislation also introduced severe criminal penalties for individuals and businesses using or operating unauthorized crypto services. Transactions exceeding 50 million Hungarian forints ($162,000) could lead to prison sentences of up to two years, while larger transactions worth up to 500 million forints ($1.62 million) carried penalties of as much as five years behind bars.
Meanwhile, crypto service providers operating without approval from Hungary's central bank faced prison sentences of up to eight years, making the country's framework one of the harshest in Europe.
Government Calls Previous Policy Politically Motivated
The policy reversal comes after growing criticism from both the crypto industry and European regulators.
Hungary's Minister of Science and Technology, Zoltán Tanács, recently announced the government's intention to eliminate the controversial penalties, describing the previous rules as "politically motivated" rather than necessary safeguards for financial markets.
The regulations also attracted scrutiny from the European Union, which reportedly launched an investigation into whether Hungary's restrictions complied with broader EU financial regulations and digital asset policies.
The crackdown contributed to a noticeable decline in domestic crypto trading activity as investors and businesses sought alternatives outside the country.
Hungary Signals More Crypto-Friendly Future
By removing criminal liability for crypto trading and easing restrictions on digital asset platforms, Hungary appears to be moving toward a more balanced regulatory approach that aligns more closely with developments across Europe.
The planned rollback could encourage crypto companies to resume operations in the country while restoring confidence among local investors who faced significant legal uncertainty over the past year. Although details of the replacement framework have not yet been announced, the government's latest statements suggest that Hungary intends to replace punitive measures with a more innovation-friendly regulatory environment that supports digital asset adoption without criminalizing participation in the market.
The decision reflects the broader global trend of governments seeking clearer crypto regulations that protect consumers while allowing blockchain innovation and digital finance to continue developing.
