Hungary to Scrap Strict Crypto Rules After Major Industry Exodus
Removal of extra requirements for local crypto firms to breathe new life into the sector.
1Hungary's tough crypto regulations
Hungary had introduced strict national rules on top of the EU's MiCA regulations. These included requirements for each crypto exchange transaction to be certified by a 'validator' and prison sentences of up to two years for providing unauthorized exchange services. Companies were given until July 1, 2025 to comply, which was shorter than MiCA's 18-month transition period.
2Industry exodus from Hungary
The harsh regulations caused many crypto firms to withdraw from Hungary. Companies like Revolut, MoonPay, Strike and Kriptomat suspended services. CashCoin relocated operations to the Netherlands, announcing it would return via MiCA passporting. This exodus dealt a significant blow to Hungary's crypto sector.
3CoinCash's achievement and struggle
CoinCash became the first Hungary-based firm to receive a MiCA license on July 20 after a 16-month review process. The company had to suspend operations for seven months. CEO Attila Mogyorósi emphasized the license's importance, stating 'We chose to face Europe's toughest regimes head-on.'
4Details of the new legislation
Hungary's parliament approved legislation removing the additional national crypto asset requirements. If enacted, Hungary will no longer be an outlier under MiCA. CoinCash's license will remain valid regardless of changes, while other European crypto firms can serve Hungarian clients without navigating separate domestic rules.
5Industry reaction and expectations
The removal of regulations has been welcomed by the crypto sector. Experts believe this move could make Hungary an attractive market again. MiCA-licensed firms are expected to return and increase investments in the country.
6MiCA's role in Europe
The EU's Markets in Crypto-Assets (MiCA) regulation aims to establish standards for Europe's crypto sector. Implemented with an 18-month transition period, MiCA gives firms more flexibility to comply. Hungary's extra national rules had eliminated this flexibility.
7Regulatory trends in crypto
Globally, crypto regulations are increasing. The EU's MiCA, UK's crypto asset regime and US SEC approach offer different models. Hungary's initially strict approach had to change in response to industry mobility.
8A new era for Hungary
The removal of regulations signals a new era for Hungary's crypto sector. Industry representatives say this move will make the country attractive for investment again and support financial innovation. A MiCA-compliant environment could strengthen Hungary's position in Europe's crypto ecosystem.