The Hungarian parliament has voted to repeal provisions that required validation checks for cryptocurrency asset conversions in order for them to be legal. The legislative update also removes crypto-related offenses carrying prison sentences of up to eight years from the national criminal code.
Removal of Duplicate Compliance Rules
Passed by the Hungarian Parliament as Act XXXVIII of 2026 on the Repeal of Certain Statutory Provisions Concerning Crypto-Asset Conversion Services, the measure abolished the validation checks that previously applied to European exchanges operating in Hungary. The changes were voted on July 31 and implemented on August 7.
According to András Gaál, an associate at the law firm Schönherr, the prior rules treated crypto asset conversions without prior validation as unauthorized crypto transactions under the Criminal Code. Legal experts noted that the old regulations were incompatible with the EU internal market and redundant alongside the broader MiCA framework, which reached full implementation on July 1 to ensure access to safe crypto service providers.
Decriminalization of Unauthorized Services
The repealed framework had established specific criminal offenses related to digital assets, including:
- Abuse of crypto assets: Punished unauthorized exchanges of significant value for money or other crypto assets with imprisonment of up to two years, or up to five years for particularly significant values.
- Unauthorized crypto-asset exchange service provision: Classified operating service activities in violation of validation obligations as a felony punishable by up to three years in prison, with sentences increasing to up to eight years under certain circumstances.
Katalin Horváth, a partner at CMS Budapest, noted that payment institutions, crypto asset service providers, and intermediaries with in-scope conversions previously routed to authorized validators should now unwind those processes following the alignment with EU standards.
