Hungary Takes Hardline Stance on Crypto With New Regulations.
As of July, unauthorised cryptocurrency trading is officially a criminal offence in Hungary. As part of a larger legislative package, two new crimes have been added to the Criminal Code, strictly regulating the exchange and distribution of crypto assets
Hungary officially implemented new cryptocurrency legislation starting July 1, prohibiting any unlicensed digital asset trading activities. Individuals using unlicensed encryption services can face up to 2 years in prison.
For single transactions exceeding 50 million forints (approximately 140,000 USD), the sentence can reach 3 years, and for amounts exceeding 500 million forints, the maximum sentence can be 5 years. For unlicensed service providers, the maximum sentence can reach 8 years.
But it’s not just those providing the service who face penalties; users of these services may also face prosecution. For instance, someone who sells their Bitcoin through an unlicensed platform is liable to between 2 and 5 years in prison, depending on the amount involved.
Hungary Stance Puts Many at Risk
An estimated 500,000 or more people in Hungary own some form of crypto asset, many of whom have legally acquired it using taxed income. These individuals now find themselves in a legal grey area: while holding crypto is not against the law, selling or exchanging it can no longer be done legally.
Since no licensed Hungarian exchanges exist, practically anyone trying to convert crypto into fiat currency would be committing a criminal offence.
Additionally, Industry commentators warn the law may trigger a broader exodus: crypto companies, startups, and innovation-minded operators are considering relocation to more welcoming jurisdictions like the Baltic states or other EU countries. Critics suggest Hungary may be isolating itself from EU regulatory alignment just as MiCA (Markets in Crypto‑Assets Regulation) begins full rollout across the bloc on July 1, 2025.
EU Alignment Or Contradiction.
It’s believed that there are political motives behind the new legislation. The timing, the lack of implementation rules, and the severity of the penalties suggest that the government may be sending a political signal that “playing with crypto” is no longer welcome. In practice, however, no one knows what’s legal and what isn’t.
The agency in charge of licensing crypto service providers, the Hungarian Supervisory Authority for Regulated Activities (SZTFH), has yet to publish any procedural guidelines. As a result, the law exists, but compliance is nearly impossible.
While Hungary’s legislation ostensibly implements the EU’s MiCA framework, observers note its punitive structure and failure to provide operational clarity diverge sharply from the uniform, innovation-friendly tone of EU harmonization efforts. The misalignment raises concerns that Hungary may become a crypto outlier within Europe.
