Minister of Science and Technology Zoltán Tanács said the previous system created sudden “validator gatekeepers,” with only one company at first, and later just two, authorized to approve crypto transactions.

He described the setup as a severe market restriction that effectively made a fast-growing sector non-functional.

The rules also left an estimated 600,000 to 800,000 private users facing potential criminal liability, including prison, simply for holding or exchanging digital assets.

As legal uncertainty grew, many users reportedly lost access to hundreds of thousands or even millions of forints in value because normal activity became risky or impossible.

Tanács said the issue goes beyond Bitcoin and affects broader blockchain-based financial and data-transfer technologies, which he described as an important part of the future.

He also noted that the EU had already launched infringement proceedings against Hungary over the overly strict rules.

The government now plans to introduce proportionate, transparent regulation focused on anti-money laundering and consumer protection, without criminal penalties for ordinary users.

According to Tanács, the goal is for Hungary to become a participant in blockchain development, not a laggard.

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