Hungary reverses crypto trading crackdown after EU scrutiny
In brief
- Hungary unwinding crypto restrictions introduced in 2025 requiring compliance certificates for conversions
- Restrictions exposed users to potential jail sentences of two to eight years depending on transaction size
- Digital asset platforms including Revolut suspended crypto services in Hungary due to the rules
- EU probe examined whether restrictions were compatible with bloc regulations
The restrictions and their impact
[Hungary is set to decriminalize crypto trading], reversing rules that imposed potential jail terms for certain crypto-to-fiat and crypto-to-crypto transactions. [The restrictions required approved validation for crypto conversions and attached criminal penalties to violations]. Under the framework that took effect on July 1, 2025, individuals exchanging crypto worth between 5 million and 50 million Hungarian forint through unauthorized exchanges could face up to two years in prison. [Penalties increased to five years for transactions between 50 million and 500 million forint], and reached up to eight years for amounts above 500 million forint.
[Crypto exchanges could only be carried out with a compliance certificate issued by an authorized crypto asset conversion validation service provider]. [Crypto conversion validation service providers required authorization from Hungary's Supervisory Authority of Regulated Activities] and were tasked with checking crypto asset origin, identifying wallet ownership, assessing user profiles, and verifying transactions. [Transactions lacking the compliance certificate were treated as unauthorized crypto-transactions with invalid asset transfers].
Market impact and political shift
[The restrictions contributed to a decline in crypto trading activity in Hungary]. [Digital asset platforms including Revolut suspended crypto services in Hungary due to the restrictions]. Köböl stated the legislation was unnecessary and made practical operation impossible. The criminal consequences also negatively impacted several hundred thousand people, according to the government spokesperson.
[An EU probe was initiated into whether Hungary's restrictions were compatible with EU rules], adding external pressure to the government's reversal. The shift reflects broader political change: [Hungary's April 12 parliamentary election ended the 16-year rule of Prime Minister Viktor Orban], bringing [Peter Magyar's pro-European Tisza Party into government]. [The new Hungarian administration moved to ease tensions after years of conflict between Hungary and the EU].
"This was an unnecessary piece of legislation. It made practical operation impossible and frightened the market participants. The criminal consequences also negatively impacted several hundred thousand people." — Anita Köböl, Tisza government spokesperson
Frequently asked questions
Why did Hungary's crypto restrictions cause so much disruption?
The rules required compliance certificates for all crypto conversions and imposed jail sentences of two to eight years for unauthorized exchanges, depending on transaction size. This scared market participants and prompted major platforms like Revolut to suspend services.
What triggered Hungary to reverse the crypto crackdown?
An EU probe into whether the restrictions were compatible with bloc regulations, combined with a change in government after April 2025 elections that brought the pro-European Tisza Party to power, prompted the new administration to ease tensions with the EU.
