Hungary has scrapped a controversial layer of crypto oversight, removing a mandatory third‑party validator check that had complicated crypto trading and pushed several firms to suspend or leave the market. The repeal, approved by Parliament, brings Hungary’s rules closer to the EU’s Markets in Crypto‑Assets (MiCA) framework and clears the way for companies such as CoinCash to resume and expand services.
What changed
- Parliament voted to eliminate the validator requirement after the rule disrupted domestic crypto activity, Finance Minister Kármán András said. The decision was reported by Hungarian tax and legal outlet Ado.hu.
- The repeal removes an extra transaction‑approval step that had existed alongside MiCA, but leaves standard licensing and compliance obligations for crypto asset service providers intact.
Background: what the validator rule did
- The validator regime was introduced in Hungary’s 2024 crypto assets law and took effect on July 1, 2025 — earlier than the EU’s extended transition deadline of July 1, 2026 that other member states could use.
- Under that law, certain crypto‑to‑fiat and crypto‑to‑crypto conversions required approval from a licensed local validator before they could be legally recognized.
- Validators — supervised by Hungary’s Supervisory Authority of Regulated Activities — were mandated to verify wallet ownership, trace the origin of assets, check customer identities and transaction history, and issue a compliance declaration.
Why it mattered
- The extra validation step created operational friction and legal uncertainty. Several firms suspended services or left Hungary, and trading volumes fell.
- Earlier legislation also attached criminal penalties to unauthorized crypto activity. Reporting at the time (Forbes) outlined prison terms for individuals and operators depending on transaction amounts — penalties that the current government has said it plans to remove or soften.
- The restrictive approach prompted criticism from industry and EU scrutiny; officials have signaled a desire to align Hungarian policy with MiCA and to remove disproportionate sanctions.
Political context
- The U‑turn follows Hungary’s April 2026 election, which brought a pro‑European government led by the Tisza Party into power and ended Viktor Orbán’s long tenure. New ministers and spokespeople described the prior framework as excessive and politically motivated.
- Government spokespeople and the Innovation and Technology Minister, Zoltán Tanács, publicly backed moving closer to MiCA and revising the harsher aspects of the previous law.
Industry impact and milestones
- Budapest-based CoinCash (operator Tiwala Solutions) completed its MiCA licensing process: the National Bank of Hungary granted authorization on July 20, allowing the firm to offer custody, crypto‑to‑fiat exchanges, crypto‑to‑crypto trading, asset transfers, investment advice and portfolio management under EU rules. CoinCash had suspended operations in December 2025 while preparing for MiCA compliance.
- Other providers reacted earlier by scaling back services; Revolut suspended crypto in Hungary, and some companies reportedly considered relocating to Estonia or Lithuania.
What to expect
- With the validator requirement gone and plans to remove criminal penalties previously linked to routine trading, Hungary’s regulatory stance is now closer to the EU norm under MiCA. That should reduce legal uncertainty and make it easier for licensed firms to rebuild services and for trading activity to recover.
- The EU’s investigation into whether Hungary’s earlier rules complied with union law remains a factor in the broader regulatory picture.
Bottom line: Hungary has removed a contentious validation layer that had hindered crypto activity and driven enforcement concerns. The move, coupled with MiCA authorizations like CoinCash’s, signals a recalibration toward EU‑level regulation and a more industry‑friendly operating environment.
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