Budapest scraps criminal penalties of up to eight years for unlicensed crypto activity as it moves toward the bloc's common standard. Hungary has repealed a national crypto law that carried s
Budapest scraps criminal penalties of up to eight years for unlicensed crypto activity as it moves toward the bloc's common standard.
Hungary has repealed a national crypto law that carried some of the harshest penalties in the European Union. The rule allowed prison terms of up to eight years for individuals or firms trading digital assets without proper licensing. Authorities have now scrapped the measure to bring the country into step with MiCA, the EU's bloc-wide framework for crypto assets.
MiCA was designed to replace a patchwork of national crypto laws with a single regulatory standard across all 27 member states. It covers licensing, custody, stablecoin issuance, and market conduct rules for crypto asset service providers. Hungary's earlier law predated MiCA and imposed criminal liability that went well beyond what the EU framework requires.
The repeal removes a legal risk that had made Hungary an outlier among EU members. Firms operating or seeking to operate in the country faced a stricter enforcement regime than counterparts in most other member states. That gap created uncertainty for exchanges and custodians weighing whether to expand into the Hungarian market.
By aligning with MiCA, Hungary adopts the EU's passporting system. A crypto firm licensed in one member state can operate across the bloc without seeking separate approval in each country. Hungary's previous rules sat outside that structure, effectively isolating its market from the EU's harmonized licensing regime.
The change follows a broader pattern across Europe as national governments finish transposing MiCA into domestic law. The framework became fully applicable across the EU in stages through 2024 and 2025, with member states given time to repeal conflicting national statutes. Hungary's move is one of the more visible examples of a country walking back tougher domestic penalties in favor of the common EU standard.
Details on the exact legislative process behind the repeal, including timing of parliamentary approval and any transition provisions for firms previously operating under the old regime, were not specified in available reporting. It also remains unclear whether Hungarian regulators plan additional guidance for companies transitioning to MiCA-based licensing.
The repeal is likely to lower the perceived regulatory risk of operating in Hungary for crypto exchanges and service providers. Firms that avoided the market due to the threat of criminal prosecution may reconsider entry now that MiCA's civil and administrative framework applies instead. Because MiCA passporting allows licensed firms to serve customers across the EU, Hungary's alignment could also make it easier for regional players already licensed elsewhere to extend services into the country.
The change adds to a broader trend of EU-wide regulatory convergence, which market participants have generally viewed as reducing fragmentation. A more uniform legal environment across member states can lower compliance costs for firms operating in multiple EU jurisdictions, though the practical effects in Hungary specifically will depend on how quickly local enforcement practices adjust.
Hungary's repeal removes one of the EU's stricter national crypto laws and brings the country's legal framework closer to the bloc-wide MiCA standard, though further details on implementation are still emerging.
The previous law allowed prison sentences of up to eight years for individuals or businesses trading crypto assets without proper licensing.
MiCA, or Markets in Crypto-Assets, is the European Union's unified regulatory framework covering licensing, custody, and conduct rules for crypto asset service providers across all member states.
Hungary repealed the rules to align its national legal framework with MiCA, which sets a common EU standard and allows licensed firms to operate across the bloc.
No. Hungary now falls under the MiCA framework, which still requires licensing and compliance, but replaces the country's harsher criminal penalties with the EU's standardized rules.
Originally reported by AltcoinGordon, written by Liam Carter. Republished with permission.
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