Hungary scraps its crypto prison sentences

A sharp reversal from one of the EU's harshest crypto regimes

Hungary is dismantling what had become one of the most restrictive crypto frameworks in the European Union. The new government is scrapping the digital asset rules introduced under former Prime Minister Viktor Orban, eliminating the prison sentences that had driven major platforms from the country, according to government spokesperson Anita Kobol.

Kobol confirmed the reversal at a press conference on June 11, stating the previous legislation "made practical operation impossible and frightened the market participants."

The rollback reverses legislation that took effect July 1, 2025. Under those rules, transactions ranging between 50 million Hungarian forints (roughly $162,000) and 500 million forints (roughly $1.62 million) carried prison terms of up to two or five years depending on transaction value. Service providers operating without a central bank license faced sentences of up to eight years.

Every crypto-to-fiat and crypto-to-crypto transaction was required to pass through a compliance certificate issued by a government-approved validator, under a system operated by the Supervisory Authority for Regulated Activities (SARA). At the point the criminal provisions became active, SARA had not registered a single authorized validator, meaning every transaction was technically illegal the moment the law took effect.

Platforms fled, Brussels investigated, and now the policy is gone

Revolut suspended all cryptocurrency services for its Hungarian users on July 7, 2025, freezing holdings without prior notice, before fully exiting the market by December 18, 2025. The regulation also led to a drop in crypto trading in Hungary and to a European Union probe into the compatibility of the restrictions with the bloc's rules.

The European Commission opened infringement proceedings against Hungary's validation regime, citing direct incompatibility with MiCA, the EU-wide Markets in Crypto-Assets framework. MiCA's architecture does not permit individual member states to impose parallel national gatekeeping layers on top of EU-level licensing.

Hungary's new Minister of Science and Technology, Zoltan Tanacs, who took office after the formation of a new government in May 2026, characterized the rules as politically motivated rather than legitimate market safeguards. The new administration plans to abolish criminal prosecution for market participants and align national law with MiCA, with officials identifying Estonia as the template for rebuilding Hungary's digital regulatory environment.

The Hungarian government has not yet set a timeline for when the legislative changes will take effect.

Sources:
Bloomberg: Hungary to Decriminalize Crypto Trading in Reversal From Orban
The Block: Hungary to scrap Orban-era crypto rules that carried jail terms
Bitcoin Magazine: Hungary Backs Away From Bitcoin and Crypto Criminalization