Hungary is scrapping draconian regulations to avoid conflict with the pan-European Markets in Crypto-Assets (MiCA) framework, abandoning national requirements and abolishing offenses related to the unauthorized use of cryptocurrencies.
The Hungarian Parliament recently passed Act No. XXXVIII of 2026 "On the Repeal of Certain Legislative Provisions Concerning Crypto-Asset Conversion Services," which eliminated verification procedures that any European exchange had to undergo to operate legally in Hungary.
According to András Gaál, an attorney at the law firm Schonherr, under the old rules, converting crypto-assets without prior verification was considered an unauthorized crypto transaction—an offense classified under Act C of 2012 "On the Criminal Code."
The repeal, voted on July 31 and effective August 7, was unique to Hungary and established two offenses for the unauthorized use of crypto-assets:
The first—"Abuse of crypto-assets"—stipulated that "a person exchanging crypto-assets of significant value for cash or other crypto-assets using an unauthorized crypto-asset exchange service is guilty of a misdemeanor and is punishable by imprisonment for up to two years, unless the commission of a more serious crime is established," however, the penalty was increased to 5 years if the offense was committed "to a particularly significant extent."
The second repealed offense was "Unauthorized provision of crypto-asset exchange services," which stipulated that "a person conducting crypto-asset exchange activities to a significant extent in violation of the verification obligation stipulated by the Crypto-Asset Market Act is guilty of a criminal offense and is punishable by imprisonment for up to three years," with the prison term increasing to up to eight years under certain circumstances.
Katalin Horváth, a partner at CMS Budapest, emphasized that this Act was incompatible with the EU's internal market and duplicated the provisions of MiCA, which guarantee users access to reliable crypto service providers and came fully into force on July 1.
"Payment institutions, crypto-asset service providers, and intermediaries carrying out conversion within the scope of the Act, directed at authorized validators, must now cease these processes," she concluded.
