Hungary Scraps Crypto Prison Sentences, Reversing Orbán-Era Crackdown

What Happened

On June 11, 2026, the Hungarian government announced it would scrap criminal penalties for cryptocurrency trading, according to Bitcoin Magazine and Bloomberg. Government spokesperson Anita Kobol confirmed the policy reversal. Zoltán Tanács, Hungary's Minister of Science and Technology, called the previous framework "politically motivated" rather than a genuine market safeguard.

The legislation being reversed took effect July 1, 2025. Parliament had passed rules criminalizing the use of unlicensed exchanges and certain high-value unauthorized crypto transactions. Under those rules, transactions between 50 million Hungarian forints (roughly $162,000) and 500 million forints (roughly $1.62 million) carried prison sentences of up to two to five years. Service providers operating without a central bank license faced up to eight years behind bars.

Both crypto-to-fiat and crypto-to-crypto conversions required approved validation. That wasn't a paperwork nuisance. It was a structural barrier that made normal trading potentially criminal.

The Damage Already Done

The consequences were immediate and measurable. Revolut suspended its crypto services in Hungary rather than operate under the restrictions, according to Bitcoin Magazine. Domestic trading volumes declined as local firms absorbed steep compliance costs. The EU opened a probe into whether Hungary's rules violated bloc-wide regulations.

Hungary had built one of the most restrictive crypto frameworks in the European Union. That framework came with significant baggage: fewer platforms, lower volumes, and an active EU investigation.

What Comes Next

Tanács outlined three concrete changes, according to Bitcoin Magazine's reporting: abolishing criminal prosecution for crypto market participants, revising cybersecurity rules affecting roughly 4,000 Hungarian businesses currently subject to the EU's NIS2 directive, and aligning national law with the EU's Markets in Crypto-Assets (MiCA) regulation.

Officials named Estonia as the explicit template. Estonia has been one of the more crypto-permissive EU member states and built a licensing framework that attracted international operators. Hungary is signaling it wants the same.

Tanács said the reforms should draw international platforms back to Hungary and reduce friction for domestic operators.

The Strongest Case for the Old Rules

Proponents of Hungary's 2025 crackdown could argue that unlicensed crypto exchanges genuinely carry money-laundering and fraud risks, that the prison sentences targeted only large-value unauthorized transactions rather than ordinary retail users, and that requiring central bank licensing is consistent with how every other financial sector operates. The EU itself has moved toward mandatory registration and disclosure under MiCA. Hungary's rules weren't entirely at odds with where European regulation was heading, just significantly more punitive.

The practical outcome was unambiguous: Revolut left, volumes dropped, and the EU itself questioned whether the framework was legally compatible with bloc rules. A regulatory regime that drives out licensed, compliant operators while doing nothing provably effective against actual bad actors is difficult to defend on the merits. The government's own minister called it "politically motivated," which is a notable concession from the inside.

The Broader Picture

Hungary's reversal matters beyond its borders. The Orbán-era framework was the EU's harshest, and its failure — measured in platform exits and EU scrutiny — provides a data point for other member states weighing how aggressively to restrict digital assets. MiCA, which came into full effect across the EU in late 2024, already provides a compliance baseline. Countries that pile additional criminal liability on top of that framework now have Hungary's one-year experiment as evidence of what happens.

No timeline for the legislative changes has been publicly confirmed in the sources available as of June 13, 2026. Whether platforms like Revolut will return to Hungary once the legal changes are formally enacted remains unclear. The reputational damage of the 2025 crackdown may make Hungary a lower priority despite the policy shift.