New Law Criminalizes Routine Crypto Transactions
Hungary has passed a new wide-ranging law that effectively criminalizes unregulated crypto activity. The legislation, which became operative on July 1, 2025, targets traders and businesses dealing in crypto without the approval of the state. Penalties vary from up to five years in prison for individual traders, to a maximum of eight years for service providers that transfer large amounts without permission.
Traders and Providers at Legal Risk
The law stipulates escalating penalties based on transaction volume. Individuals can face:
- Up to 2 years for straightforward unlicensed transactions
- 3 years for transactions exceeding 50 million HUF (~$140,000)
- 5 years for transactions exceeding 500 million HUF (~$1.4 million)
Crypto platforms that fail to obtain official approval can face three years in prison—or eight years if operating in large volumes.
Mandatory State Validation
All crypto exchanges must now undergo a state-controlled validation regime, including:
- Identity and wallet ownership verification
- Customer profiling
- Traceability of funding sources
Without verification, the trade of crypto for fiat or other assets is illegal.
Industry Exodus Imminent
Hungarian cryptocurrency market players are warning of a chilling effect. With no open guidance or consistency mechanism, many organizations are halting operations or preparing to exit.
Revolut suspended its crypto activities in Hungary last week. Other companies are thinking of moving to more welcoming EU jurisdictions like Estonia or Lithuania.
Impact on Global Platforms Unclear
Major global exchanges like Binance, Coinbase, and Kraken have yet to publicly comment. Although local sources suggest the impact on them could be small, the regulatory uncertainty could prompt re-evaluation of operations.
500,000 Hungarians Affected
Estimates put 500,000 Hungarians active in crypto—many of whom are now under threat of criminal liability if they continue to engage in unlicensed transactions.
The government has given regulators a 60-day period in which to come up with enforcement guidelines, but for Hungary’s businesses and crypto users, the future is already uncertain.
