Hungary has officially announced plans to decriminalize cryptocurrency trading, reversing restrictive measures implemented under former Prime Minister Viktor Orbán's administration. According to government spokeswoman Anita Kobol, the government plans to scrap penalties that carried potential prison terms of up to two years for individuals and up to eight years for service providers without proper licensing. The rollback follows Hungary's April 2026 parliamentary election, which brought the pro-European Tisza Party to power, with newly appointed Minister of Science and Technology Zoltán Tanács describing the previous framework as 'politically motivated' rather than necessary market safeguards.
The restrictive measures, which took effect on July 1, 2025, required approved validation for crypto-to-fiat and crypto-to-crypto conversions and criminalized the use of unlicensed exchanges. Under the previous framework, individuals faced prison terms of up to two years for transactions between 50 million Hungarian forints ($162,238) and 500 million forints ($1.62 million), while service providers could face sentences of up to eight years for operating without a central bank license. The regulations also created two offenses around abuse of crypto assets by users and provision of unauthorized crypto asset exchange services by operators, with transactions completed without proper validation considered legally invalid.
The restrictive measures prompted immediate market responses, with Revolut suspending cryptocurrency services in Hungary and other digital asset platforms reportedly exploring relocation to jurisdictions such as Estonia and Lithuania. According to local estimates, roughly 500,000 Hungarians were involved in cryptocurrency activities when the legislation was introduced, with trading volumes for digital assets declining following implementation. The European Union has opened an investigation into whether those rules complied with bloc regulations, adding to the pressure for policy reversal and contributing to the government's decision to scrap the penalties.
While removing crypto restrictions, Hungary faces mounting pressure from its tightened foreign labour policies. Master Good, one of Hungary's largest vertically integrated poultry producers, warned that the company's planned HUF350bn (€1bn) expansion would be unfeasible under the government's new foreign labour rules. CEO Laszlo Barany argued at a labour market conference that Hungary's shrinking working-age population and structural labour shortages make it impossible to staff large-scale industrial projects solely with domestic workers. The government announced plans to ban the import of guest workers from June 1, though it stopped short of introducing a full ban and will amend procedures for workers from the Philippines, Georgia and Armenia.
With the criminal provisions now set to be removed, the government is seeking to bring Hungary's approach closer to the European Union's Markets in Crypto-Assets framework. The reversal represents a significant shift from the previous politically driven approach to a more aligned regulatory framework that better supports the European Union's broader cryptocurrency policy objectives. This development comes as Hungary transitions to a more pro-European political stance following the recent parliamentary elections, while simultaneously addressing labour market challenges through policy adjustments.
