New Crypto Regulations in Hungary
Hungary has enacted a law imposing penalties for individuals engaging in cryptocurrency trading via unauthorized exchanges. Using these so-called “unauthorized crypto asset exchange services” could lead to severe consequences, including prison time of up to two years, depending on the amount traded. The updated criminal law officially took effect on July 1st.
The legislation targets unauthorized crypto service providers, with penalties that could extend to three years in prison, especially if the value of the illegal transactions is substantial. Local news outlet Telex reported on July 1st that this new law unsettles many crypto companies in the country, as the Hungarian Supervisory Authority for Law (SZTFH) now has 60 days to establish a compliance framework. Yet, there’s currently a lack of guidance in this process.
New Penalties for Crypto Trading
Under this law, anyone trading on unauthorized crypto exchanges could face prison sentences of up to two years for engaging in transactions valued between 5 million and 50 million forints (around $14,600 to $145,950). This penalty increases to three years for “particularly large value” trades ranging from 50 million to 500 million forints (approximately $145,950 to $1.46 million).
For offenses involving over 500 million forints, the penalties could escalate to five years in prison.
Punishments for Fraudulent Activities
The revised law also stipulates that individuals involved in fraudulent “crypto asset exchange service activities” could face up to three years in prison for transactions up to 50 million forints ($145,950).
Similar to the penalties related to unauthorized exchanges, crypto service providers could be sentenced to five years for crimes involving up to 500 million ($1.46 million) and up to eight years for amounts exceeding that threshold.
Revolut’s Changes Amid New Laws
Earlier this month, reports surfaced that UK-based fintech firm Revolut had halted its operations in Hungary due to these regulations. According to a local news outlet, Revolut announced that it would stop all crypto-related services, including withdrawals, citing the newly implemented Hungarian laws. They did not provide a timeline for when services might resume.
However, subsequent reports indicated that Revolut re-enabled withdrawals for some cryptocurrencies just a few days later. The company also stated that its EU division is actively working to secure cryptocurrency licenses within the EU.
