Catenaa, Thursday, June 11, 2026- Hungary is preparing to dismantle a controversial cryptocurrency framework introduced under former leader Viktor Orbán, a move that would remove prison penalties for certain crypto activities, restore access to digital asset services and potentially bring the country back into alignment with broader European Union regulations.
Government spokesperson Anita Kobol said authorities intend to scrap the restrictive measures that took effect in July 2025 and imposed criminal penalties on some cryptocurrency transactions and unlicensed service providers.
The regulations required official authorization for both crypto-to-fiat and crypto-to-crypto conversions. The rules quickly drew criticism from industry participants who argued that they created barriers to innovation and investment.
Several international platforms responded by restricting services in Hungary. Among them was Revolut, which suspended certain crypto offerings following the introduction of the legislation.
The government now appears ready to reverse course after less than a year of implementation.
The original law was among the toughest cryptocurrency regulatory frameworks adopted within the European Union.
Individuals conducting unauthorized transactions involving values between 50 million Hungarian forints and 500 million forints faced prison terms of up to two years. Larger transactions could result in sentences of up to five years.
Service providers operating without a license from the country’s central bank faced even harsher consequences. Under the legislation, operators could receive prison sentences of up to eight years.
The severity of the penalties attracted attention across Europe’s digital asset sector, where most jurisdictions have focused on licensing, compliance requirements and financial supervision rather than criminal sanctions for market participation.
The restrictions coincided with a decline in domestic cryptocurrency activity, according to industry reports.
Market participants argued that regulatory uncertainty discouraged investment and pushed traders toward foreign jurisdictions offering clearer frameworks. Smaller crypto businesses also faced challenges meeting licensing requirements and compliance obligations.
The measures arrived at a time when several European countries were expanding support for regulated digital asset services under the European Union’s Markets in Crypto-Assets framework, commonly known as MiCA.
As neighboring countries moved toward regulatory harmonization, Hungary’s approach increasingly appeared to be an outlier within the bloc.
The policy shift also follows scrutiny from European authorities.
Reports indicate that the European Union examined whether Hungary’s restrictions were compatible with broader EU rules governing financial services and digital assets.
The bloc has spent several years developing a unified regulatory environment through MiCA, which seeks to create consistent standards across member states while encouraging innovation and investor protection.
A national framework that imposes criminal penalties beyond those commonly seen elsewhere in Europe risked creating tensions with the EU’s objective of regulatory consistency.
Hungary’s decision could improve the operating environment for both domestic and international crypto firms.
The removal of criminal penalties may encourage service providers that reduced or suspended operations to reassess their presence in the country. It could also restore confidence among investors who viewed the previous framework as excessively restrictive.
The shift reflects a broader trend across Europe where policymakers are increasingly focused on integrating digital assets into regulated financial systems rather than prohibiting their use.
For crypto businesses, regulatory predictability remains one of the most important factors influencing investment decisions and market expansion.
Hungary’s planned rollback represents a dramatic change in digital asset policy less than a year after one of Europe’s toughest crypto laws took effect. By eliminating prison penalties and reconsidering restrictive licensing requirements, the government is signaling a move toward a more conventional regulatory approach that aligns more closely with European standards.
Hungary introduced its restrictive cryptocurrency legislation in June 2025, with enforcement beginning on July 1 of the same year. The law emerged during a period of increasing regulatory attention toward digital assets across Europe. While most European Union members focused on implementing the MiCA framework, Hungary adopted a tougher stance that criminalized certain unauthorized cryptocurrency activities. The move stood in contrast to jurisdictions such as Germany, France and the Netherlands, which emphasized licensing and supervision rather than criminal enforcement. Across Europe, regulators have generally sought to balance consumer protection with innovation, particularly as institutional investment and stablecoin adoption continue to grow. Hungary’s decision to reconsider its approach reflects the challenges governments face when attempting to regulate a rapidly evolving sector while remaining aligned with broader EU financial rules.
