Hungary Scraps 8-Year Crypto Penalties Under New Government

Hungary's new government has announced plans to fully decriminalize cryptocurrency trading and dismantle the punitive regulatory framework imposed under former Prime Minister Viktor Orban, removing jail sentences of up to eight years for ordinary users and providers.

The move is part of the new administration's broader pivot toward EU alignment, institutional reform, and restoring access to frozen EU funds. The restrictive regime was built on the 2024 Crypto Act (Act VII of 2024) and tightened through Decree 10/2025, issued by the Supervisory Authority for Regulated Activities (SARA) on October 27, 2025.

The rules required a mandatory 'validation certificate' from a SARA-licensed validator for virtually every crypto-to-fiat and crypto-to-crypto transaction. Validators conducted enhanced due diligence beyond standard KYC checks, including verification of asset origin, wallet ownership, and associated persons. Transactions without a valid certificate were legally void.

Criminal penalties scaled with transaction size: service providers and exchanges faced up to 8 years in prison for operating without proper Central Bank of Hungary (MNB) licensing, while individual users faced 2 to 5 years depending on transaction value, with thresholds roughly tied to 50 to 500 million HUF (approximately $162,000 to $1.62 million).

The new government plans to unwind these measures, calling the prior legislation 'an unnecessary piece of legislation' that 'made practical operation impossible and frightened the market participants.' The changes include full abolition of the mandatory validation certificate requirement, complete decriminalization of crypto trading and related services, removal of all jail terms for users and service providers, and a new regulatory framework built around EU MiCA licensing standards.