Hungary scraps controversial crypto validator checks, moves to align with MiCA
Hungary’s parliament has voted to abolish a contentious third‑party validator requirement that had added an extra layer of approval to certain crypto transactions — a move the government says will help reboot the local market and bring Hungary’s rules closer to the EU’s Markets in Crypto‑Assets (MiCA) framework.
What changed
- Lawmakers repealed the 2024 rule that forced some crypto‑to‑fiat and crypto‑to‑crypto conversions to obtain pre‑transaction approval from licensed local validators.
- The repeal removes the mandatory compliance certificate and the validation step that required checks on wallet ownership, source of funds, customer identity and transaction histories.
- Hungary’s basic licensing and MiCA compliance obligations for crypto service providers remain intact; the change simply eliminates the extra national approval layer.
Why the rule was controversial
- The validator regime took effect July 1, 2025, after Budapest shortened the EU‑allowed transition window and required firms to comply a year earlier than many other member states.
- The 2024 Crypto Act and related criminal code amendments had attached criminal penalties to unauthorized exchange services and transactions conducted outside the validation process — and transactions without a compliance certificate were treated as legally invalid.
- Reporting at the time warned the rules created legal uncertainty and dampened activity: Revolut suspended crypto services in Hungary, several firms curtailed operations or considered relocating to Estonia or Lithuania, and trading volumes fell. An estimated 500,000 Hungarians were using crypto when the law was introduced.
Political and regulatory context
- The repeal follows a change in government after Hungary’s April 2026 election, which ended Viktor Orbán’s 16‑year premiership and installed Peter Magyar’s pro‑European Tisza Party. Officials from the new administration criticized the previous framework as excessive and politically motivated.
- Finance Minister Kármán András said the validator requirement had disrupted the domestic market and prompted firms to leave or pause services; he noted the market was beginning to recover after the repeal. Government spokespeople had also indicated plans to remove prison penalties tied to crypto trading.
- The European Commission reportedly opened an investigation into whether Hungary’s earlier regime complied with EU law.
Criminal penalties under the old rules
- Reporting from Forbes documented steep penalties under the earlier framework: individuals faced up to two years in prison for transactions of 5–50 million HUF, up to five years for 50–500 million HUF, and up to eight years for transactions above 500 million HUF. Operators of unauthorized exchange services faced three to eight years depending on volumes.
Industry impact and next steps
- The validator role had been supervised by Hungary’s Supervisory Authority of Regulated Activities. With the repeal, that extra approval step is gone, but firms still must meet MiCA licensing and compliance requirements.
- Budapest‑based CoinCash (operator: Tiwala Solutions) completed its MiCA authorization process and on July 20 received direct authorization from the National Bank of Hungary. CoinCash said it is the first Hungarian company to secure such central bank authorization and plans to gradually restore suspended services and roll out additional MiCA‑regulated products. The approval covers custody, crypto‑to‑fiat and crypto‑to‑crypto trading, transfers, investment advice and portfolio management. CoinCash had voluntarily halted operations in December 2025 to ready itself for MiCA compliance.
Bottom line
The repeal removes a nationally imposed gatekeeper that had been blamed for chilling crypto activity in Hungary and for potential conflicts with EU law. It signals a shift toward harmonizing Hungary’s rules with MiCA, easing immediate operational friction for crypto firms while leaving the core EU‑level licensing and compliance framework in place. Market participants and watchers will be looking to see how quickly suspended services return and whether the change encourages firms that left to come back.
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