What the Validation Process Will Look Like – Response from Caduceus Zrt., The First Hungarian Validator
Over the past decade, the cryptocurrency industry has often been associated with regulatory uncertainty and limited transparency. While the United States and parts of Asia have gradually introduced more supportive regulatory frameworks, Europe has largely taken a more supervisory and control-oriented approach. This trend has been particularly visible in Hungary, where since July 2025 market participants have increasingly speculated about how digital asset usage will be regulated beyond the scope of the EU’s Markets in Crypto-Assets Regulation (MiCA).
According to information published last week, Caduceus Zrt. has become the first service provider in Hungary to be formally recognized as an official validation service provider, with the stated aim of bringing greater structure and traceability to blockchain-based transactions. In response to our inquiry, József Kollár, Member of the Board of Directors at Caduceus Zrt., outlined what users and institutional partners can expect from the validation process.
Blockchain Transparency and the Role of Validation
Caduceus Zrt. states that as the crypto-asset market matures, there is growing demand for transactions to be conducted in a regulated and traceable manner. The concept of “validation” is intended to address this need.
Validation, as defined by the company, does not focus on identifying clients or determining the origin of funds in the traditional sense. Instead, it analyzes the transactional history and relational structure of blockchain addresses. The process relies entirely on on-chain data, meaning publicly available blockchain information is examined and assessed.
Although Caduceus Zrt. is not a bank, exchange, or regulatory authority, its validation service positions the company as a form of independent trust assessor within the crypto ecosystem. As stated in the company’s communication:
“The validation service complements, but does not replace, the business partner’s KYC and AML systems.”
This distinction is central to the service’s design: the validator does not approve or reject transactions, but instead provides risk characterization to support decision-making by financial institutions and crypto service providers.
The Validation Process Step by Step
According to the company’s response, each validation is linked to a specific crypto-asset transaction and consists of four core components:
- Backward tracing: retrospective analysis of the crypto asset’s transaction history and source chain.
- Forward tracing: assessment of the recipient address’s behavioral patterns and network interactions.
- Clustering: identification of relationships between addresses and entities, enabling indirect risk exposure to be evaluated.
- Risk database screening: comparison of addresses against international AML and sanctions databases.
The outcome of this process is a compliance-style validation statement using a three-tier risk classification:
- Acceptable
- Requires attention
- High risk
This standardized structure allows banks, brokers, and crypto-asset service providers to determine appropriate next steps based on their internal compliance policies and risk tolerance frameworks.
Regulatory Context: Hungary and the European Union
Caduceus Zrt. emphasizes that validation is not only a technical process but also a legal and regulatory consideration. With the implementation of the MiCA Regulation, crypto-asset service providers must obtain proper authorization before operating within the EU’s internal market.
As part of its onboarding process, Caduceus reviews whether a partner’s activities qualify as crypto-asset services under MiCA and, if so, whether the entity holds the required MiCA license. This additional checkpoint highlights the company’s intention to align blockchain-based transactions with EU-level regulatory expectations.
In this sense, the validation service is positioned as a link between state regulation and decentralized finance, potentially contributing to the broader integration of the Hungarian crypto market into established financial compliance standards.
Pricing and User Access
At present, details regarding how users can initiate transaction validation and the exact pricing structure have not yet been disclosed. According to József Kollár:
“Information regarding the pricing of Caduceus Zrt.’s validation services will be published on our website in due course, in accordance with the applicable legal requirements.”
As the framework continues to take shape, further clarification is expected on operational access, cost structure, and the scope of eligible transactions.