The Hungarian Parliament passed Act XXXVIII of 2026 on July 31, removing mandatory validation checks for crypto conversions that took effect on August 7. According to reports from crypto.news, the legislation removes a national validation requirement that had applied to crypto-to-fiat and crypto-to-crypto conversions. Under the previous system, covered crypto conversions had to pass through an authorized validation provider, with transactions completed without the required validation qualifying as unauthorized crypto transactions under Hungary's criminal law.
The repeal eliminates two criminal offenses that carried significant prison sentences. The first offense, 'Abuse of crypto assets', applied to unauthorized crypto-asset exchange services and could result in prison terms of up to two years for basic violations, increasing to five years for particularly serious circumstances. The second offense, 'Unauthorized crypto-asset exchange service provision', carried penalties of up to three years for basic violations and up to eight years for more serious cases. As reported by crypto.news, converting crypto assets without prior validation had constituted an unauthorized crypto transaction under Act C of 2012 on the Criminal Code.
The changes remove a separate national compliance layer alongside the EU's MiCA framework, which provides a common licensing framework for crypto-asset service providers across the European Union. According to reports from crypto.news, Hungary had introduced the criminal provisions as part of a crypto framework that came into force in 2025, creating uncertainty for exchanges and service providers. Local estimates cited at the time put the number of Hungarians involved in cryptocurrency activities at roughly 500,000. The regulatory uncertainty also affected crypto companies, with Revolut suspending its crypto services in Hungary after the rules took effect, while some other firms considered moving operations to EU jurisdictions including Estonia and Lithuania.
The repeal completes a reversal that the Hungarian government had signaled earlier this year as it reconsidered the criminal provisions and separate validation regime. On June 11, the government confirmed plans to remove the penalties after the 2025 restrictions disrupted domestic crypto trading and prompted platforms to reduce services. The planned crypto rollback followed Hungary's April parliamentary election, which brought the Tisza Party to power after 16 years of government under former Prime Minister Viktor Orbán. Government spokeswoman Anita Kobol said Hungary intended to reverse measures introduced under the previous administration, with newly appointed Minister of Innovation and Technology Zoltán Tanács describing the former framework as 'excessive and politically driven'.
The repeal means companies operating under the European framework no longer need to route covered Hungarian conversions through the separate national validation system. According to reports from crypto.news, Katalin Horváth, a partner at CMS Budapest, said the Hungarian system was incompatible with the EU internal market and duplicated protections already established through MiCA. The timing follows the end of the EU's MiCA transition period on July 1, when crypto firms operating through legacy national registrations faced new restrictions unless they secured authorization under the bloc's regulatory framework. Shortly after the deadline, the European Securities and Markets Authority added another 57 authorized firms to its register, bringing the total to 300.
