Hungary has repealed national crypto rules that required a validation check for crypto-asset conversions to be treated as legal, removing a restrictive layer of domestic regulation as the country aligns its framework with the European Union’s Markets in Crypto-Assets regulation, or MiCA.
The measure was approved by parliament on July 31 and took effect on Aug. 7. With the change, Hungary also removed crypto-related criminal provisions from its penal code that had carried penalties of up to eight years in prison under certain circumstances.
What the repeal changes
Before the repeal, any European exchange seeking to operate legally in Hungary had to pass a validation process tied to crypto-asset conversions. Under those rules, converting crypto assets without prior validation was considered an unauthorized crypto transaction.
The new measure abolishes that validation requirement. In practice, it removes a national condition that sat alongside the EU-wide regime and had created a separate Hungarian standard for lawful crypto activity.
Criminal provisions removed from the penal code
The repealed framework had introduced specific criminal offenses linked to the unauthorized use of crypto assets. One offense, described as abuse of crypto assets, was classified as a misdemeanor punishable by up to two years in prison, increasing to five years in cases involving particularly significant value.
A second offense, unauthorized crypto-asset exchange service provision, was treated as a felony. It carried a sentence of up to three years, with penalties rising as high as eight years under certain circumstances.
By repealing these provisions, Hungary has withdrawn the crypto-specific offenses that had been embedded in national criminal law. The source article characterizes the earlier approach as unusually strict and says the change was made to avoid conflicts with the EU framework.
Why MiCA is driving the shift
The stated purpose of the legislative change is to prevent clashes between Hungarian rules and MiCA, the bloc-wide framework for crypto markets. Rather than maintaining separate national requirements for validation and related offenses, Hungary is moving to rely on the common EU approach.
According to the source, the change is intended to let users access safe crypto service providers while eliminating rules seen as redundant under MiCA. The repeal therefore does not create a separate new Hungarian licensing model in the article’s description, but instead removes domestic provisions that overlapped with or conflicted with the EU regime.
Timeline and next step
The parliamentary vote passed on July 31, and the repeal came into force on Aug. 7. From that date, the national validation checks and the associated crypto-related criminal offenses were no longer part of Hungary’s legal framework as described in the report.
The next confirmed step is Hungary’s continued operation under MiCA rather than the repealed domestic system. That means the country’s crypto rules are now framed by the EU-wide standard instead of the stricter national provisions that had previously applied to conversions and exchange activity.
Source: news.bitcoin.com