According to PANews, Hungary has implemented one of the world's strictest cryptocurrency laws, effective from July 1, causing widespread confusion and concern in the fintech industry. The new regulations have led major fintech companies to halt services, with digital bank Revolut announcing an immediate suspension of its cryptocurrency services in Hungary.
The legislation introduces two criminal offenses: severe penalties for using unauthorized services and operators, with basic transactions facing up to two years in prison, transactions over 50 million Hungarian forints facing up to three years, and transactions exceeding 500 million forints facing up to five years. Additionally, service providers operating without proper authorization may face harsher penalties, with larger operations potentially resulting in up to eight years of imprisonment.
The law's broad wording and lack of implementation guidelines could affect approximately 500,000 citizens involved in cryptocurrency purchases, potentially criminalizing previously legal activities. The regulatory body has 60 days to establish a compliance framework but has yet to issue guidance. Regulatory uncertainty may lead businesses to relocate, with some companies already considering moving elsewhere.
While enforcement on global platforms is unlikely, Hungarian-registered companies and individual investors face significant legal uncertainty. The cryptocurrency community is awaiting clarification from regulatory authorities, but industry groups have not received an official response. The sector faces difficult choices, and Hungary's actions may isolate it within the European Union's digital asset regulatory landscape.
