TLDR

Hungary’s new laws criminalize using unauthorized crypto exchanges with penalties of up to 2-5 years in prison
Unauthorized crypto service providers face up to 8 years imprisonment for violations
Law took effect July 1, 2025, but regulatory frameworks have a 60-day development period
International platforms including Revolut and Bitstamp have suspended services in Hungary
Penalties increase based on transaction values, with trades over 500 million forints ($1.46M) receiving the harshest sentences

Hungary has implemented tough new cryptocurrency regulations that criminalize not only operating unauthorized exchanges but also using them, setting the country apart with some of the strictest crypto laws in Europe. The changes to Hungary’s Criminal Code, which took effect on July 1, have created confusion in the market as regulatory guidance lags behind enforcement.

Under the new laws, individuals caught trading crypto through unauthorized exchanges face up to two years in prison for transactions between 5 million and 50 million forints ($14,600 to $145,950). For higher value trades between 50 million and 500 million forints ($145,950 to $1.46 million), the penalty increases to three years imprisonment. The harshest punishment of up to five years applies to transactions exceeding 500 million forints.

Service providers face even more severe consequences. Those operating unauthorized crypto exchanges can receive up to three years in prison for activities involving up to 50 million forints. This increases to five years for amounts up to 500 million forints and a maximum of eight years for larger sums.

The regulatory changes have created a legal gray area that affects an estimated 500,000 Hungarians who own digital assets. While holding cryptocurrencies like Bitcoin remains legal, the trading restrictions have disrupted access to the market.

Regulatory Confusion and Industry Response

The implementation of these laws has left both users and companies in a state of uncertainty. Hungary’s Supervisory Authority for Regulatory Affairs (SZTFH) has been given 60 days to develop compliance frameworks, but no guidance exists in the interim period.

This regulatory limbo has forced international crypto platforms to reconsider their operations in Hungary. UK-based fintech company Revolut initially suspended all crypto-related services in the country due to the new legislation. The company later reinstated withdrawal capabilities only, while working toward obtaining an EU crypto license.

Bitstamp has also reportedly halted services for Hungarian residents in response to the new regulations. Without clear licensing procedures, global exchanges have no clear path to compliance, leaving many to exit the market temporarily or permanently.

The Hungarian National Bank has been put in charge of policing the sector. All crypto service providers operating in Hungary must now obtain a license from the central bank to continue operations legally.

Beyond EU Requirements

Hungarian officials have stated that the rules align with the EU’s Markets in Crypto-Assets (MiCA) framework, with some added safeguards like a mandatory “conversion-validation certificate” for each trade.

However, critics within the industry argue that the penalties are far harsher than those outlined in MiCA. Some suggest the absence of a licensing window indicates the rules are designed to discourage trading entirely rather than regulate it effectively.

The law was passed through parliament on June 17 and enacted on July 1, leaving little time for market participants to adjust. The speed of implementation, combined with the lack of regulatory guidance, has created challenges for both domestic firms and global exchanges.

For trades defined as “unauthorized,” the law applies regardless of transaction size, though penalties increase with higher values. This has created a situation where even small retail traders could face criminal charges if using unlicensed platforms.

Hungarian authorities have not provided a timeline for when licensing criteria will be released. This leaves the industry in a continued state of uncertainty as companies and users try to navigate the new legal landscape.

The Supervisory Authority for Regulated Activities has yet to publish application procedures, leaving domestic firms with no clear path to legitimacy. Without official licensing routes, the Hungarian crypto market remains effectively frozen for compliant operators.

For now, the safest option for Hungarian crypto holders appears to be holding assets without trading or ensuring they only use platforms that have obtained proper authorization, once such authorizations become available.

The post New Hungarian Law Makes Using Unlicensed Crypto Exchanges a Criminal Offense appeared first on Blockonomi.

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Filed under: Bitcoin - @ July 15, 2025 9:17 am