On July 1, Hungary enacted new cryptocurrency laws imposing strict criminal penalties for individual traders and service providers operating on unauthorized exchanges.
Criminal Penalties for Individual Traders and Service Providers
The amended Criminal Code establishes a tiered penalty system based on transaction values. Individuals using unauthorized crypto exchanges face up to two years in prison for trades between 5 million and 50 million forints (approximately $14,600 to $145,950). The penalty escalates to three years for transactions classified as 'particularly large value' between 50 million and 500 million forints ($145,950 to $1.46 million). Those conducting trades exceeding 500 million forints can receive prison sentences of up to five years.
Regulatory Uncertainty Creates Market Confusion
The new laws have created significant uncertainty within Hungary's cryptocurrency sector. Local news outlet reports that crypto companies serving the country remain confused about compliance requirements. Hungary's Supervisory Authority for Regulatory Affairs (SZTFH) has 60 days to develop compliance frameworks, but no guidance currently exists for businesses operating in the interim period.
Market Response and Service Adjustments
Following the initial suspension, Revolut partially reinstated services, allowing only cryptocurrency withdrawals. The limited restoration suggests companies are adopting cautious approaches while awaiting clearer regulatory guidance. The legislation represents Hungary's attempt to regulate cryptocurrency activities within existing criminal law frameworks rather than creating specialized financial regulations.
Hungary's new cryptocurrency legislation establishes some of Europe's strictest criminal penalties for unauthorized digital asset trading, with prison sentences reaching up to eight years for major violations. The regulatory uncertainty has already prompted service suspensions from major providers like Revolut, while businesses await clearer compliance guidance from Hungarian authorities.
