Hungary’s new government is scrapping severe crypto restrictions, including 8-year prison terms, explicitly signaling full alignment with EU MiCA standards and Estonia’s functional digital licensing framework.
Key Takeaways
Hungary scrapping 2–8 year prison sentences for unlicensed crypto trading under Act LXVII of 2025.
Mandatory SARA validation certificates abolished, covered all crypto-to-fiat and crypto-to-crypto transactions.
Revolut suspended all crypto services for Hungarian users last year, fully exiting by December 18, 2025.
EU opened MiCA infringement proceedings against Hungary’s validation regime.
New government modeling framework on Estonia’s FIU-supervised digital licensing system.
Hungary’s new government is scrapping the crypto restrictions introduced under Viktor Orbán, whose 16-year rule ended after the April 2026 elections brought Péter Magyar’s pro-European Tisza Party to power. Government spokesperson Anita Köböl confirmed the reversal at a press conference on June 11, stating the previous legislation “made practical operation impossible and frightened the market participants,” adding that “the criminal consequences also negatively impacted several hundred thousand people.”
The framework being dismantled is Act LXVII of 2025, which amended both Hungary’s Criminal Code and Act VII of 2024 on the Market of Crypto-Assets, effective July 1, 2025. Every crypto-to-fiat and crypto-to-crypto transaction was required to pass through a compliance certificate issued by a government-approved validator under a system operated by the Supervisory Authority for Regulated Activities (SARA). Trading through unlicensed platforms carried prison sentences of 2 to 8 years depending on transaction size. The new administration is abolishing those penalties entirely and dismantling the validation layer.
The Damage Was Already Done
The practical consequences landed fast. Revolut suspended all cryptocurrency services for its Hungarian users on July 7, 2025, freezing holdings without prior notice. The company subsequently fully exited the market by December 18, 2025, after SARA failed to register any approved validators, making it structurally impossible to comply with the law even for platforms that wanted to.
The SARA certificate system was the mechanism that made normal operations structurally impossible. At the point the criminal provisions became active, SARA had not registered a single authorized validator, meaning every transaction was technically illegal the moment the law took effect. No major international platform could operate under those conditions, which is why they exited.
Why the EU Angle Accelerated the Reversal
The rollback is not purely domestic politics. The European Commission opened infringement proceedings against Hungary’s validation regime, citing direct incompatibility with MiCA, the EU-wide Markets in Crypto-Assets framework that sets a harmonized regulatory floor across all member states. MiCA’s architecture does not permit individual member states to impose parallel national gatekeeping layers on top of EU-level licensing. Hungary’s SARA validation system did exactly that.
A new government signaling full EU alignment had both political and legal incentive to move quickly. Resolving the infringement proceedings through administrative withdrawal of the SARA system is faster than full legislative reform, and the Magyar government has been explicit about modeling Hungary’s digital asset framework on Estonia, specifically its single-window digital licensing system operated under Financial Intelligence Unit (FIU) supervision, widely regarded as the EU’s most internationally compatible crypto licensing model.
What This Means for the Broader MiCA Map
Hungary’s reversal is the clearest live test of what happens when a member state builds a national crypto regime that directly conflicts with MiCA and then faces political change. The answer is rapid dismantling, driven simultaneously by EU enforcement pressure, market exit by major platforms, and electoral accountability.
For operators that left Hungary last year, the structural conditions that forced the suspension, the SARA layer and the criminal penalties, are being removed. The more significant question is whether platforms rebuild domestic infrastructure or re-enter through passporting under their existing EU MiCA licenses, which the regulation enables directly without additional national licensing.
The Estonia comparison the Magyar government is invoking is deliberate: Estonia built its crypto reputation through low-friction licensing, full MiCA alignment, and institutional credibility. Hungary is attempting to replicate that outcome through reversal rather than incremental reform, starting from one of the most restrictive positions any EU member state has ever held.
