Hungary to scrap crypto penalties and certification rule

Hungary's new government is moving to dismantle a strict cryptocurrency framework that imposed prison penalties for unauthorized trading, a major policy reversal following a change in leadership and pressure from the European Union. The planned rollback, announced this week, aims to decriminalize crypto transactions and remove compliance barriers that caused several trading platforms to suspend services in the country.

The restrictive rules were introduced in 2025 under the previous administration of Prime Minister Viktor Orbán and took effect on July 1 of that year. The legislation required all cryptocurrency-to-fiat and crypto-to-crypto transactions to obtain a compliance certificate from a licensed local validator to be considered legally valid. Failure to comply carried significant criminal penalties. Individuals faced prison terms of up to two years for unauthorized transactions, with sentences escalating to up to five years for larger transactions exceeding 500 million Hungarian forints. Service providers operating without a central bank license risked prison sentences of up to eight years.

The regulations quickly disrupted the domestic market. Financial technology...