Hungary scraps crypto validator rule, aligns with MiCA

Hungary’s parliament voted Tuesday to repeal the mandatory cryptocurrency validator requirement that had forced firms including CoinCash to suspend services, bringing the country’s regulatory framework closer to the European Union’s Markets in Crypto-Assets (MiCA) regime.

The legislation eliminates an additional compliance layer that required third-party approval for certain crypto-to-fiat and crypto-to-crypto conversions. Finance Minister Kármán András said the government decided to scrap the rule after it disrupted the domestic market and led several companies to withdraw or suspend operations.

Writing on Facebook, András said many cryptocurrency businesses had ended operations in Hungary because of the earlier regulations and that the market was beginning to recover following the policy change.

The repeal removes the separate transaction validation process that had operated alongside MiCA. Hungary’s licensing and compliance obligations for crypto asset service providers remain unchanged.

The validator requirement originated under Hungary’s 2024 crypto assets law, which introduced a distinct compliance process for selected cryptocurrency transactions. After the rules took effect on July 1, 2025, conversions covered by the framework required approval from a licensed local validator before they could proceed. Validators had to examine the origin of digital assets, confirm wallet ownership, verify customer identities, and issue a compliance declaration before transactions could receive legal recognition.

The framework operated alongside MiCA. Hungary also shortened the transition period available to crypto asset service providers, requiring firms to comply by July 1, 2025, even though the EU allowed member states to extend the transition until July 1, 2026.

Earlier legislation attached criminal liability to certain cryptocurrency activities. Amendments to Hungary’s Criminal Code and Act VII of 2024, commonly known as the Crypto Act, created offenses covering unauthorized crypto exchange services and transactions completed outside the approved validation process.

Transactions completed without a compliance certificate were considered legally invalid. Licensed crypto conversion validation service providers, supervised by Hungary’s Supervisory Authority of Regulated Activities, were responsible for reviewing wallet ownership, customer profiles, transaction history, and the source of crypto assets before issuing certificates.

The latest repeal follows policy changes announced after Hungary’s April 2026 parliamentary election, which ended former Prime Minister Viktor Orbán’s 16-year tenure and brought Peter Magyar’s pro-European Tisza Party into government.

In June, government spokeswoman Anita Kobol said Hungary planned to remove prison penalties linked to cryptocurrency trading after restrictions introduced under the previous administration contributed to falling trading activity and prompted several platforms to reduce their presence in the country. Kobol also said the European Union had opened an investigation into whether Hungary’s previous crypto rules complied with EU law.

Innovation and Technology Minister Zoltán Tanács described the earlier regulatory framework as excessive and politically driven. The government said it intended to bring Hungary’s approach closer to MiCA.

According to a Forbes report published after the restrictions came into force, individuals using unauthorized crypto services faced prison terms of up to two years for transactions valued between 5 million and 50 million Hungarian forints. Penalties increased to five years for transactions between 50 million and 500 million forints, while transactions exceeding 500 million forints carried prison sentences of up to eight years. The same report said operators providing unauthorized crypto exchange services also faced prison terms ranging from three to eight years depending on transaction volumes.

Industry participants cited by Forbes warned that the framework created legal uncertainty for users and companies alike. The publication also noted that around 500,000 Hungarians were involved in cryptocurrency activities when the legislation was introduced.

As the regulatory environment changed, Budapest-based CoinCash completed its licensing process under MiCA. According to a company announcement reviewed by Cointelegraph, the National Bank of Hungary granted MiCA authorization to CoinCash operator Tiwala Solutions on July 20.

CoinCash co-founder Gábor Galántai said in a LinkedIn post on Friday that the company had become the first Hungarian business to receive direct authorization from the country’s central bank under the EU framework. The authorization permits CoinCash to offer custody services, crypto-to-fiat exchanges, crypto-to-crypto trading, digital asset transfers, investment advice and portfolio management under MiCA.

CoinCash said it underwent a months-long compliance review before receiving approval. The company had voluntarily suspended operations in December 2025 while preparing to satisfy MiCA requirements after the earlier Hungarian rules created additional regulatory obligations.

Several crypto businesses adjusted their operations while Hungary’s stricter framework remained in place. Revolut suspended cryptocurrency services in Hungary after the restrictions took effect. Other digital asset companies reportedly considered relocating to countries including Estonia and Lithuania. Trading activity declined following implementation of the rules.

With parliament now removing the validator requirement and the government previously announcing plans to eliminate criminal penalties tied to crypto trading, Hungary’s regulatory framework is moving closer to MiCA. CoinCash has said it will gradually restore its services and expand into additional MiCA-regulated products beyond cryptocurrency trading after securing its authorization from the National Bank of Hungary.