Hungary Plans to Drop Criminal Penalties for Crypto Trading After EU Review

Hungary is preparing to decriminalize crypto trading, undoing rules that could have subjected market participants to criminal penalties for certain crypto-to-fiat and crypto-to-crypto conversions, government spokesperson Anita Köböl said. At a Thursday press conference, Köböl said the framework introduced last year required an approved validation to complete crypto conversions and attached criminal sanctions for breaches, a combination that she said depressed market activity. She described the rules as unnecessary and said they made day-to-day operations impractical and deterred participants. Köböl added that the criminal provisions affected several hundred thousand people. The restrictions also led several digital asset platforms, including Revolut, to pause crypto services in Hungary, she said. The measures drew scrutiny from the European Union, which examined whether Hungary's approach was compatible with EU rules. The planned rollback would represent a shift away from Hungary's 2025 crypto framework, which created a restrictive approval system and exposed both users and service providers to potential criminal liability. Under a legislative package passed in 2025, Hungary amended its Criminal Code and Act VII of 2024 on the crypto market, known as the Crypto Act. Amendments effective July 1, 2025 required that crypto exchanges be conducted only with a compliance certificate issued by an authorized crypto asset conversion validation service provider. Transactions without such a certificate were classified as "unauthorized cryptotransactions," with related asset transfers deemed invalid and unable to produce legal effect. The framework also created a new regulated entity—a crypto conversion validation service provider—requiring authorization from Hungary's Supervisory Authority of Regulated Activities. These providers were required to verify the origin of crypto assets, identify wallet or device ownership, assess user profiles, and check transactions against external databases before issuing compliance certificates. Under the rules, individuals or entities exchanging crypto valued between 5 million Hungarian forint and 50 million forint (about $16,000 to $160,000) via an unauthorized exchange service could face up to two years in prison. Penalties rose to five years for transactions between 50 million forint and 500 million forint, and up to eight years for transactions above 500 million forint. The policy reversal follows Hungary's April 12 parliamentary election, which ended the 16-year tenure of nationalist Prime Minister Viktor Orban and brought Peter Magyar's pro-European Tisza Party into government. The new administration has moved to ease tensions after years of conflict between Hungary and the EU. With additional reporting from Zoltan Vardai.