According to the latest legal regulations, engaging in cryptocurrency trading on unlicensed trading platforms can result in a maximum of 8 years in prison.
Original: Hassan Shittu, cryptonews
Translation: Yuliya, PANews
Hungary has suddenly shifted to criminally prosecuting unauthorized cryptocurrency activities, becoming one of the most aggressive countries in the EU, turning everyday crypto trading into a potential legal minefield. According to the latest legal regulations, engaging in cryptocurrency trading on unlicensed trading platforms can result in a maximum of 8 years in prison. This new regulation has forced several large fintech companies to suspend services, affecting millions of users.
This new regulation took effect on July 1, causing a stir in the fintech industry. Industry insiders warn that it could lead to a massive withdrawal of funds, leaving investors in a state of legal confusion.
Hungary criminalizes unauthorized cryptocurrency trading, with a maximum sentence of 8 years
According to Hungary's newly revised Criminal Code, two new offenses have been added: "abuse of crypto assets" and "providing unauthorized cryptocurrency exchange services."
Under the new law, anyone engaging in cryptocurrency trading on an unlicensed platform can be sentenced to a maximum of 2 years in prison. If the transaction amount exceeds 50 million Hungarian forints (approximately $140,000), the sentence can be up to 3 years; if the transaction amount exceeds 500 million forints, the sentence can extend to 5 years.
Additionally, the law imposes the harshest penalties on service providers operating without government-approved licenses, with a maximum sentence of 8 years in prison. This comprehensive reform has caught businesses and investors off guard.
According to local media Telex, about 500,000 Hungarians invest in crypto assets using legally declared income, but under the new regulatory framework, many of these users may face criminal charges due to past or ongoing crypto activities.
A source from Telex stated, "Ordinary users are at risk of prosecution simply for managing their investments as usual."
"This law is being implemented without any compliance guidelines being published, and no one knows how to comply."
It is worth noting that the Hungarian Financial Supervisory Authority (SZTFH) has 60 days to establish enforcement and compliance mechanisms, but the current legal environment remains unclear.
The new law also requires all cryptocurrency transactions—whether exchanging tokens for fiat currency or exchanging other tokens—to be reviewed by authorized "validators" and to obtain compliance certificates. Transactions without this compliance certificate will be considered legally invalid, and participating in such transactions may trigger criminal penalties.
Although the law states that transactions below certain thresholds may be exempt, no clear exemption standards have been established yet.
Revolut suspends crypto operations in Hungary, new law leaves compliance path shrouded in fog
The uncertainty of the law has led major market players to withdraw from Hungary. On July 9, London-based neobank Revolut announced it would suspend all cryptocurrency services "until further notice." Revolut has over 2 million users in Hungary.
Users can still transfer existing crypto assets to external wallets, but purchasing, topping up, and staking services have been completely frozen. Revolut stated that the suspension is to ensure full compliance with Hungarian domestic laws and the newly introduced EU crypto regulatory framework MiCA.
Revolut is currently applying for MiCA authorization through its EU entity, but the additional local licensing requirements from the Hungarian central bank complicate the process. As of July 7, Revolut has also completely frozen crypto asset balances and even disabled the token sale feature.
Revolut emphasized that this measure is temporary and added, "We are working to restore services as soon as the regulatory path becomes clearer."
Hungary diverges from the EU's unified crypto regulatory path
Hungary's crackdown on crypto trading comes at a particularly unique time, as the EU's MiCA regulatory framework also took effect on July 1. MiCA aims to establish a unified legal framework for the crypto market across the EU, with several member states choosing to delay implementation to ensure a smooth transition. However, Hungary has diverged from this coordinated path.
An analyst interviewed by Forbes stated, "It is difficult to understand why Hungary is implementing such strict regulations just as the EU has established unified standards. This will create significant legal uncertainty and hinder fintech innovation."
However, the crackdown on crypto trading seems to be part of a broader policy trend in Hungary. The government has also introduced regulations limiting foreign ownership of companies and laws that allocate some citizens' donated funds to the state.
Critics argue that these policies primarily affect more educated voters in urban areas, who typically do not support the ruling Fidesz party.
While enforcement actions against global trading platforms like Coinbase or Binance are considered unlikely, businesses registered in Hungary and local users now face legal risks. This has led to a paradox—foreign platforms may continue to serve Hungarian customers with little consequence, while local companies may face prosecution.
However, the Hungarian central bank's announcement on July 3 to exclude cryptocurrencies from official reserves further exacerbates the restrictive atmosphere, citing the volatility of crypto assets and unclear regulations.
The central bank stated, "The stability and reliability of reserve assets must be prioritized." It also reiterated its preference for traditional assets such as gold and fiat currency.
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