Hungary scraps crypto validator checks to align with MiCA framework

Hungary has removed its controversial cryptocurrency validator requirement after lawmakers voted to repeal the rule, clearing the way for crypto firms including CoinCash to restore services under the European Union’s Markets in Crypto-Assets (MiCA) framework.

According to Hungarian tax and legal publication Ado.hu, the Hungarian Parliament approved legislation on Tuesday repealing the mandatory third-party validation process that had applied to certain cryptocurrency transactions. 

Finance Minister Kármán András said the government decided to eliminate the requirement after the previous framework disrupted the domestic crypto market and led several companies to withdraw or suspend their services.

Writing on Facebook, András said many cryptocurrency businesses had ended operations in Hungary because of the earlier regulations and that the market was beginning to recover following the policy change.

The repeal removes an additional transaction approval layer that existed alongside MiCA while leaving the country’s licensing and compliance obligations for crypto asset service providers unchanged.

Hungary has removed an extra crypto approval step

The validator requirement originated under Hungary’s 2024 crypto assets law, which introduced a separate compliance process for selected cryptocurrency transactions.

After the rules took effect on July 1, 2025, crypto-to-fiat and crypto-to-crypto conversions covered by the framework required approval from a licensed local validator before they could proceed. Validators had to examine the origin of digital assets, confirm wallet ownership, verify customer identities, and issue a compliance declaration before transactions could receive legal recognition.

The framework operated alongside the European Union’s MiCA regulation. Hungary also shortened the transition period available to crypto asset service providers, requiring firms to comply by July 1, 2025, even though the EU allowed member states to extend the transition until July 1, 2026.

Earlier legislation also attached criminal liability to certain cryptocurrency activities. Amendments to Hungary’s Criminal Code and Act VII of 2024, commonly known as the Crypto Act, created offenses covering unauthorized crypto exchange services and certain crypto transactions completed outside the approved validation process.

As reported previously, transactions completed without a compliance certificate were considered legally invalid. Licensed crypto conversion validation service providers, supervised by Hungary’s Supervisory Authority of Regulated Activities, were responsible for reviewing wallet ownership, customer profiles, transaction history, and the source of crypto assets before issuing certificates.

The latest repeal follows policy changes announced after Hungary’s April 2026 parliamentary election, which ended former Prime Minister Viktor Orbán’s 16-year tenure and brought Peter Magyar’s pro-European Tisza Party into government.

Back in June, government spokeswoman Anita Kobol said Hungary planned to remove prison penalties linked to cryptocurrency trading after restrictions introduced under the previous administration contributed to falling trading activity and prompted several platforms to reduce their presence in the country.

Kobol also said the European Union had opened an investigation into whether Hungary’s previous crypto rules complied with EU law.

At the time, Innovation and Technology Minister Zoltán Tanács described the earlier regulatory framework as excessive and politically driven, while the government said it intended to bring Hungary’s approach closer to MiCA.

According to a Forbes report published after the restrictions came into force, individuals using unauthorized crypto services faced prison terms of up to two years for transactions valued between 5 million and 50 million Hungarian forints. Penalties increased to five years for transactions between 50 million and 500 million forints, while transactions exceeding 500 million forints carried prison sentences of up to eight years.

The same report said operators providing unauthorized crypto exchange services also faced prison terms ranging from three to eight years depending on transaction volumes.

Industry participants cited by Forbes warned that the framework created legal uncertainty for users and companies alike. The publication also noted that around 500,000 Hungarians were involved in cryptocurrency activities when the legislation was introduced.

CoinCash has secured Hungary’s first MiCA authorization

As the regulatory environment changed, Budapest-based CoinCash completed its licensing process under MiCA.

According to a company announcement reviewed by Cointelegraph, the National Bank of Hungary granted MiCA authorization to CoinCash operator Tiwala Solutions on July 20.

CoinCash co-founder Gábor Galántai said in a LinkedIn post on Friday that the company had become the first Hungarian business to receive direct authorization from the country’s central bank under the EU framework.

The authorization permits CoinCash to offer custody services, crypto-to-fiat exchanges, crypto-to-crypto trading, digital asset transfers, investment advice and portfolio management under MiCA.

CoinCash said it underwent a months-long compliance review before receiving approval. The company had voluntarily suspended operations in December 2025 while preparing to satisfy MiCA requirements after the earlier Hungarian rules created additional regulatory obligations.

MiCA alignment has supported the market reopening

Several crypto businesses adjusted their operations while Hungary’s stricter framework remained in place.

Revolut suspended cryptocurrency services in Hungary after the restrictions took effect, while other digital asset companies reportedly considered relocating to countries including Estonia and Lithuania. Trading activity also declined following implementation of the rules.

With Parliament now removing the validator requirement and the government previously announcing plans to eliminate criminal penalties tied to crypto trading, Hungary’s regulatory framework is moving closer to the European Union’s MiCA system.

CoinCash has said it will gradually restore its services and expand into additional MiCA-regulated products beyond cryptocurrency trading after securing its authorization from the National Bank of Hungary.