Hungary has scrapped its controversial cryptocurrency “validator” requirement, dismantling a key pillar of the country’s tougher domestic regime in order to bring its rules into line with the European Union’s Markets in Crypto-Assets (MiCA) framework.
The Hungarian Parliament has approved legislation removing the obligation for certain crypto transactions to pass through a licensed local validator, according to tax and legal outlet Ado.hu. The step clears the path for crypto firms, including Budapest-based CoinCash, to operate solely under MiCA without the extra national layer of approval.
Finance Minister Karman Andras said the government decided to abandon the validation rule after it disrupted Hungary’s crypto market and prompted several companies to withdraw or halt services. In a Facebook post, he added that many businesses had left the country because of the earlier framework and that the market was now beginning to stabilise following the policy reversal.
The validator requirement had sat on top of existing licensing and compliance duties for crypto asset service providers. Its repeal leaves Hungary’s MiCA-based authorisation and supervision structure intact, while removing the additional pre-transaction approval stage that had applied to a range of conversions.
Extra checks scrapped but MiCA rules stay
The now-abolished process stemmed from Hungary’s 2024 crypto assets law, widely referred to as the Crypto Act, which created a separate compliance track for selected digital asset dealings.
From 1 July 2025, crypto-to-fiat and crypto-to-crypto transactions covered by that framework could only proceed once a designated validator had signed them off. Validators were required to assess the origin of digital assets, confirm wallet ownership, verify customers’ identities, examine transaction histories and issue a formal compliance declaration before a conversion was recognised as lawful.
These arrangements were applied in parallel with the EU’s MiCA regulation. Hungary also opted for a shorter transition to the EU standard than Brussels allowed, forcing firms to be fully compliant by 1 July 2025 instead of taking advantage of the optional 1 July 2026 deadline.
Earlier measures went further by tying criminal penalties to certain crypto activities. Amendments to the Criminal Code and Act VII of 2024 – the Crypto Act – introduced offences for providing unauthorised crypto exchange services and for completing some transactions outside the approved validation channel.
Deals concluded without a compliance certificate were deemed legally invalid. Licensed crypto conversion validation service providers, overseen by the Supervisory Authority of Regulated Activities, had been responsible for scrutinising users’ wallets, profiles, transaction records and the source of funds before issuing the necessary certificates.
Political change and EU scrutiny
The softening of Hungary’s stance follows a shift in political direction after the April 2026 parliamentary election, which ended former Prime Minister Viktor Orban’s 16-year spell in office and brought Peter Magyar’s pro-European Tisza Party into government.
In June, government spokeswoman Anita Kobol said Hungary intended to remove prison sentences linked to cryptocurrency trading. She pointed to restrictions introduced under the previous administration as a factor behind falling trading volumes and the decision by several platforms to scale back their presence in the country.
Kobol also revealed that the European Union had launched an investigation into whether Hungary’s prior crypto rules were compatible with EU law. Around the same time, Innovation and Technology Minister Zoltan Tanacs criticised the old framework as “excessive” and politically motivated, while the new government signalled its desire to align more closely with MiCA.
A Forbes report published after the tougher rules came into force detailed the scale of potential sanctions facing users of unlicensed services. Individuals conducting transactions worth between 5 million and 50 million Hungarian forints risked prison terms of up to two years. Deals between 50 million and 500 million forints could bring up to five years in jail, while transactions above 500 million forints carried possible sentences of as long as eight years.
Operators running unauthorised crypto exchange services faced prison terms ranging from three to eight years depending on the volumes handled, Forbes added. Industry participants quoted in the article warned that the framework created legal uncertainty for both users and companies. The publication also estimated that about 500,000 Hungarians were active in crypto markets when the legislation was introduced.
CoinCash first to win MiCA licence in Hungary
Against this backdrop, CoinCash has emerged as the first Hungarian crypto business to secure MiCA authorisation directly from the National Bank of Hungary, according to a company statement seen by Cointelegraph.
The central bank granted MiCA approval to Tiwala Solutions, the operator behind CoinCash, on 20 July. In a LinkedIn post on Friday, CoinCash co-founder Gabor Galantai said the firm had become the first in Hungary to receive such authorisation from the central bank under the EU’s regime.
The licence allows CoinCash to provide custody services, crypto-to-fiat exchange, crypto-to-crypto trading, digital asset transfers, investment advice and portfolio management within the MiCA rulebook. The company said it had undergone several months of compliance checks before receiving the green light.
CoinCash had voluntarily paused its operations in December 2025 as it worked to meet MiCA standards, after the earlier Hungarian framework imposed extra domestic obligations on top of the EU rules. Following the recent authorisation, the firm plans to restore its services step by step and move into additional MiCA-regulated products beyond straightforward cryptocurrency trading.
Firms reassess Hungary stance
While Hungary’s stricter regime was in force, a number of crypto companies altered their strategies. Revolut suspended its crypto services for Hungarian customers once the tougher restrictions began, while other digital asset businesses reportedly considered relocating activities to more permissive EU jurisdictions such as Estonia and Lithuania. Trading volumes declined after the original rules were implemented.
With Parliament now abolishing the validator requirement and the government having already signalled its intention to scrap criminal penalties tied to ordinary crypto trading, Hungary’s regulatory landscape is edging closer to full alignment with the EU-wide MiCA system.
