Hungary has implemented new criminal measures related to cryptocurrencies that could impact approximately 500,000 citizens invested in this market. The tightening of regulations raises concerns about a potential exodus of crypto companies from the country.
Threats to Investors and New Criminal Offenses
Hungary's updated Criminal Code introduces severe penalties for trading cryptocurrencies without authorization. Individuals engaging in unauthorized transactions may face prison sentences of up to five years, depending on the trade volume. The laws also affect the provision of unauthorized crypto asset exchange services.
Impending Exodus of Companies and Service Suspensions
The current regulatory uncertainty is prompting companies to consider relocating to friendlier jurisdictions, such as the Baltic states. Urgent actions are needed from Hungarian authorities as Revolut has already suspended its cryptocurrency services in the country.
Differences between Hungarian Regulation and EU Standards
Hungarian cryptocurrency laws appear stricter in comparison to the new standards being developed within the European Union. This creates tension between the EU's goal of regulatory harmonization and Hungary's national course, which could adversely affect the development of the crypto industry in the country.
The tightening of legislation on cryptocurrencies in Hungary raises alarm among investors and may lead to companies migrating to other countries. This underscores the need for a balanced approach to the regulation of the crypto industry to avoid negative repercussions for local businesses.
