Hungary sets two year prison for unlicensed crypto trades

Hungary has amended its Criminal Code to impose prison sentences on individuals using or operating unauthorized cryptocurrency exchanges.

From July 1, those trading crypto on unlicensed exchanges face up to two years imprisonment for transactions valued between 5 million and 50 million forints ($14,600 to $145,950).

Penalties increase to up to three years in prison for unauthorized trades between 50 million and 500 million forints ($145,950 to $1.46 million).

Individuals providing unauthorized crypto exchange services may face up to three years in prison for handling up to 50 million forints worth of trades.

For larger offences, penalties rise to five years for activity involving up to 500 million forints and eight years if exceeding that amount.

These legal changes have caused uncertainty for crypto companies serving Hungary, as the Supervisory Authority for Regulatory Affairs has 60 days to establish compliance frameworks but has yet to provide guidance.

Local news outlet Telex reported this regulatory gap as creating confusion among industry players.

The new laws specifically target both the use of unauthorized exchanges and the provision of such services, marking a stricter regulatory approach towards crypto activity.

The UK-based fintech Revolut initially suspended its crypto services, including withdrawals, in Hungary due to the legislation.

However, Revolut later reinstated crypto withdrawals and stated that its EU division is working to obtain a crypto licence compliant with EU regulations.

Hungary’s move aligns with a broader trend of countries tightening controls on unregulated crypto operations to address risks related to illicit activity and financial security.