tl;dr
Hungary has introduced new laws imposing strict penalties on unauthorized cryptocurrency trading, effective July 1. Individuals using unauthorized crypto exchanges face up to five years in prison, with severity based on transaction amounts. Providers of unauthorized exchange services risk three to e...
Hungary has enacted new laws imposing severe penalties on individuals trading cryptocurrencies through unauthorized exchanges. According to updates to the country’s Criminal Code effective July 1, using an unauthorized crypto-asset exchange service can result in up to two years in prison, with sentences escalating based on the transaction value.
The updated regulations establish fines and imprisonment terms that vary with the amount traded: transactions between 5 million to 50 million forints ($14,600 to $145,950) carry penalties of up to two years, while trades involving from 50 million to 500 million forints ($145,950 to $1.46 million) can lead to up to three years behind bars. The harshest penalties, reaching up to five years in prison, apply to offenses exceeding 500 million forints.
Furthermore, individuals or entities providing unauthorized crypto-asset exchange services face imprisonment terms from three to eight years depending on the scale of illicit trading, mirroring the penalties for unauthorized users. Service providers dealing with up to 50 million forints risk three years of imprisonment, while offenses over 500 million forints can lead to up to eight years.
The swift introduction of these laws has left many crypto firms in Hungary in limbo, as the country’s Supervisory Authority for Regulatory Affairs (SZTFH) has a 60-day window to devise compliance frameworks, but no immediate guidance is currently available. This regulatory uncertainty stirred reactions from major players in the local crypto market.
One notable example is the UK-based fintech Revolut, which initially suspended all crypto-related operations in Hungary, including withdrawals, citing the new legislation as the cause. However, shortly after, Revolut reinstated crypto withdrawal services and indicated plans for its EU branch to secure a crypto license within the European Union, aiming to restore and expand its offerings under compliant frameworks.
These legislative moves mark a significant tightening of crypto regulation in Hungary, signaling a robust governmental approach toward controlling digital asset activities and curbing unauthorized trading in the evolving financial landscape.