Hungary's new criminal law tightens the handling of unauthorized cryptocurrency trading activities, potentially imposing prison sentences of up to 8 years, putting significant pressure on the domestic crypto community and businesses.
This regulation creates severe legal instability as there are no detailed guidelines, prompting many fintech and cryptocurrency companies in Hungary to consider relocating to other European areas with a more favorable environment.
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Hungary has implemented new criminal regulations with heavy prison sentences for illegal cryptocurrency transactions.
Unclear regulations have caused many investors and businesses to worry about unexpected prosecutions.
The tightening has pushed Revolut to temporarily suspend cryptocurrency services and poses the risk of 'bleeding' startups abroad.
How does Hungary handle unauthorized cryptocurrency trading activities?
Hungary's new regulations clearly state that using unlicensed cryptocurrency trading services can result in prison sentences ranging from 2 to 8 years, depending on the severity of the violation, according to Forbes in July 2025. This law is one of two new offenses under the amended Criminal Code effective from July 1, 2025.
Specifically, individuals conducting transactions under 50 million forint (~145,000 USD) face a maximum prison sentence of 2 years, while transactions above a 'particularly high' threshold face 3 years. Illegal trading activities of 500 million forint or more could result in a sentence of up to 5 years. For unauthorized service providers, the sentence could be up to 8 years. This directly affects about 500,000 Hungarian individual investors, according to Telex's analysis.
"The issue is that this is a law that, once in effect, no one can fully comply with."
(Anonymous industry expert, 2025, Telex)
The new Hungarian Criminal Code has yet to provide specific implementation guidelines, as the Hungarian Financial Supervisory Authority has 60 days to issue detailed regulations, making the legality of many previous activities ambiguous.
What is the impact of the new regulations on businesses and the cryptocurrency ecosystem in Hungary?
Strict measures negatively affect local fintech and cryptocurrency startups. Many companies are considering relocating to countries with more favorable legal environments like the Baltic states to maintain operations and growth.
"The startup ecosystem depends on liquidity in foreign markets. This move resembles a large migration that could weaken the entire industry."
(Fintech industry analyst, 2025)
This is even more pronounced as Revolut, a well-known digital bank from the UK widely used by many Hungarians, announced it would temporarily suspend cryptocurrency services in Hungary starting in early July 2025, affecting trading, staking, and the deposit of new cryptocurrencies. This move has raised widespread concerns about the future of cryptocurrency activities in the country.
Why is Hungary's cryptocurrency law stricter than the common EU standards?
While the European Union focuses on building uniform standards through the Markets in Crypto Assets (MiCA) legal framework, Hungary opts for a separate tightening policy, causing controversy within the international community and the EU itself.
According to Forbes, the path Hungary has chosen could isolate the country from the general regulatory trend in Europe and even push capital and businesses out of the country.
"It is hard to understand why Hungary would impose such strict regulations while the EU is specifying common standards."
(Financial expert, 2025, Forbes)
Despite this strictness, major global cryptocurrency exchanges like Binance and Coinbase still serve the Hungarian market, but local businesses cannot operate legally, creating significant pressure on the industry in the country.
Are there similar cases in the Central and Eastern European region?
Poland, the largest cryptocurrency market in Central and Eastern Europe, is facing a similar backlash as proposals to convert MiCA into national law exceed EU requirements, causing the crypto community to worry about the future of domestic businesses.
This highlights the common challenge of balancing compliance with the EU's general legal framework and strict national terms.
Frequently Asked Questions
When does the criminal law in Hungary take effect? The new law takes effect from July 1, 2025, according to updates from the Hungarian Criminal Code. What is the maximum prison sentence for unauthorized crypto service providers? The maximum can be up to 8 years for acts of providing unlicensed cryptocurrency exchange services. How many individual investors in Hungary are affected by this regulation? About 500,000 Hungarians who have invested in cryptocurrency are directly affected by the new law. Why did Revolut suspend crypto services in Hungary? Revolut has stopped providing cryptocurrency services until clear guidance on the new regulations is provided by the Hungarian authorities. Does Hungarian law affect major exchanges like Binance or Coinbase? International exchanges like Binance and Coinbase still serve the Hungarian market, but domestic businesses are significantly affected as they cannot operate legally.
Source: https://tintucbitcoin.com/luat-moi-hungary-de-doa-trader-crypto/
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