Hungary Government Cancels Criminal Penalties for Cryptocurrency Trading, Shifts from Strict Regulation to Lenient Compliance Framework
The new Hungarian government is advancing legislation to abolish criminal penalties for unauthorized cryptocurrency transactions, reversing the strict regulatory policies implemented during former Prime Minister Viktor Orbán's tenure, including the verification certificate requirements and criminal provisions effective from July 2025.
This initiative, led by the new Minister of Technology Zoltán Tanács, aims to dismantle politically driven restrictions, as previous violations could face several years of imprisonment; the new framework will align with the EU's MiCA, reducing legal risks for businesses and users, and promoting the development of blockchain startups and exchanges.
Cryptocurrency capital is rapidly flowing into the Hungarian market, with exchanges and investors benefiting from the elimination of criminal risks in a friendly regulatory environment, while previously restricted platforms are under pressure, directing funds to local compliant service providers, enhancing regional liquidity and innovative pricing power.
Source: Public Information
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Hungary's former Orbán government introduced mandatory verification certificates and criminal penalties through the Crypto Act amendment in July 2025, similar to its strict controls in other areas to consolidate power, but this led to platforms like Revolut suspending services and capital outflows; the new Tisza party government quickly shifted to a lenient approach, continuing the historical pattern of regulatory tightening and loosening among EU member states.
In terms of capital flow, the new government is redirecting regulatory resources from criminal enforcement to compliance guidance and aligning with MiCA, motivated by attracting blockchain investment to boost economic growth, locking in long-term tax revenue and innovation ecosystems by lowering entry barriers, with resources tilted towards policy execution led by the Minister of Technology to restore investor confidence.
Similar to the early shift from strict to lenient cryptocurrency policies in Singapore and Germany, the EU cryptocurrency industry is currently in a transformation phase of differentiated adjustments under the unified MiCA framework, with Hungary's move transitioning from strict regulation to a regionally friendly competitor.
Essentially a regulatory change, the abolition of criminal penalties will shift cryptocurrency access rights from political punishment to market compliance mechanisms, leading to pricing power and capital flow transitioning from high-pressure offshore to a local friendly ecosystem, reshaping investor expectations through policy reversal and forcing regional competitors to accelerate adaptation to compete for the liquidity hub status in Central and Eastern Europe.
ABAB News · Cognitive Law
Criminal pressure drives capital away, lenient compliance brings funds back.
Political barriers lock innovation, regulatory loosening opens growth doors.
Punishment earns control, trust earns ecology, policy determines direction.