The Hungarian crypto-asset market may be on the verge of a significant turning point: last week, the Ministry of Finance submitted for public consultation a proposal to amend the Act on the Market of Crypto-assets, which would abolish the much-debated validation requirement introduced last year, together with the related system of criminal liability. The proposed amendment marks a significant step towards re-aligning the Hungarian crypto regulatory framework with the EU's MiCA regime. By removing the additional Hungarian validation requirement, the government would eliminate one of the main regulatory barriers that previously discouraged investors and foreign crypto-asset service providers from entering the Hungarian market.
Additional requirements beyond EU regulation on the Hungarian market
The fundamental framework for the regulation of crypto-asset-related services was harmonised at European Union level through the MiCA Regulation adopted in 2023. As the Regulation is directly applicable in all Member States, its provisions generally do not require implementation through separate national legislation.
Nevertheless, in 2024 Hungary adopted the Act on the Market of Crypto-assets, under which, in the summer of 2025, it introduced an additional requirement exceeding the EU regulatory framework in the field of crypto-asset exchange services. Under the regulation currently in force, crypto-assets may – subject to certain exceptions – only be exchanged into fiat currency or other crypto-assets within the framework of a transaction for which a crypto-asset exchange validating service provider supervised by the Supervisory Authority for Regulated Activities issues a compliance declaration. The Act also provides that any value transfer deriving from an “unauthorised” crypto transaction shall be null and void and incapable of producing legal effect. In addition, the legislator attached criminal law consequences to the regime: criminal liability may arise both for service providers circumventing the validation requirement and for investors using crypto-asset exchange services that do not comply with the statutory requirements.
It is important to emphasise that validation is not, in fact, a form of authorisation. The role of the validating service provider is merely to analyse the chain history of the crypto-assets involved in the transaction, namely to examine the transaction history identifiable between the sending and receiving addresses. As a result of the procedure, the validator establishes a risk classification, but does not decide whether the transaction may be executed or should be refused; this remains within the discretionary powers of the service provider.
Although validation in the form of risk analysis may appear to be a mere formality, its practical application has raised several interpretative issues. In particular, numerous questions arose in relation to exchanges carried out on international crypto exchanges, especially regarding the manner in which the obligation should apply to certain exchange transactions or automated transactions executed during exchange trading.
The obligation entered into force before the necessary practical conditions were in place
One of the most significant shortcomings of the regulation was that the validation requirement entered into force in July 2025 despite the complete absence of the practical conditions necessary for its operation. At the time of its entry into force, the validating service provider market required for compliance with the obligation practically did not exist, meaning that neither service providers nor investors were able to comply with the statutory requirements. The first provider only entered the market in December 2025.
As a consequence of the legal uncertainty arising from the regulation, several investors decided to liquidate their crypto-asset portfolios, fearing that they might later be unable to lawfully access the value of their crypto-assets. At the same time, several popular international crypto-asset service providers (e.g. Revolut, CoinCash and eToro) restricted or terminated their services in Hungary, as they were unable to guarantee that their operations fully complied with the additional requirements imposed by Hungarian regulation, which did not align with the EU framework. In practice, the Hungarian validation regime became a significant obstacle not only for existing foreign providers but also for new market entrants considering passporting their MiCA authorisation into Hungary.
A change of direction: the Government would abolish the validation requirement
The bill submitted last week represents a substantive shift in the regulatory approach to the crypto-asset market. Based on the government’s communication, the primary objective is to promote digital financial innovation and to establish a competitive regulatory environment. Accordingly, the draft legislation would almost entirely abolish the validation requirement applicable to crypto-asset exchange transactions, while also repealing the related criminal law provisions. Under the proposal, the new rules would enter into force on the eighth day following promulgation, meaning that the changes could take effect as early as this summer.
What could this mean in practice?
From a market-entry perspective, the proposed reform may be particularly significant for foreign crypto-asset service providers already authorised under MiCA in another EU Member State. If adopted, the amendment would effectively remove the Hungarian-specific compliance layer that previously complicated access to the Hungarian market. As a result, service providers holding a MiCA authorisation elsewhere in the EU may once again consider offering services in Hungary through the MiCA passporting regime or, where commercially justified, establishing a local presence. The liberalization of the Hungarian crypto market may also enhance Hungary’s attractiveness as a potential jurisdiction for obtaining a MiCA authorisation, particularly for firms assessing where to establish or expand their EU operations.
The proposal may also be welcomed by private investors and high-net-worth individuals considering relocating to Hungary while maintaining substantial crypto-asset portfolios. The removal of the validation requirement would substantially reduce the legal uncertainty surrounding crypto-asset exchange transactions and could make Hungary a more attractive jurisdiction for internationally mobile crypto investors.