Hungary enforces strict new crypto laws, jail time for traders
Revolut suspends crypto in Hungary amid harsh new rules
Hungary's new repressive crypto regulations have caught both companies and users off guard.
As of July 1, Hungary has implemented some of the world’s strictest cryptocurrency laws, sparking concern and uncertainty among citizens, fintech firms, and investors.
The new regulatory framework, introduced without clear guidance, risks criminalizing digital asset trading for hundreds of thousands of Hungarians and may force leading crypto firms to leave the country.
Notably, two new criminal offenses were introduced: “crypto abuse” and “unauthorized crypto exchange services.”
Even basic transactions via unlicensed platforms could now lead to up to 2 years in prison.
Transactions of "high value" (above HUF 50 million, $140,000) may bring 3 years in prison.
Transactions above HUF 500 million ($1.4 million) could result in 5 years, and up to 8 years for service providers without licenses involved in large-scale operations.
Crypto users in legal limbo
Industry estimates suggest about 500,000 Hungarians have purchased crypto with legitimate, taxed income. However, vague wording in the new law, combined with a lack of immediate guidance, has created a legal grey zone: activities that were fully legal yesterday could now lead to criminal charges.
Hungary’s Financial Supervisory Authority (SZTFH) has 60 days to issue compliance guidelines. For now, there are no official instructions.
The new law is likely aimed at street-level currency exchanges that also offer crypto, and may not apply to global platforms like Coinbase, Binance, or Bitpanda. However, companies registered in Hungary and local investors now face severe legal uncertainty: local businesses can no longer operate legally, while foreign competitors continue serving the Hungarian market.
Part of broader crackdown
The crypto crackdown aligns with Hungary’s broader regulatory tightening, including recent restrictions on foreign acquisitions and entrepreneurial activity. Critics say these measures target urban, educated, and affluent voters—demographics less likely to support Viktor Orbán’s ruling Fidesz party.
Some observers suggest the crypto restrictions stem from fears of capital flight, particularly following the controversial "sovereignty protection" law, which redirects some citizen donations to the state treasury. An anonymous crypto insider told Cryptonomist:
“This law is practically unenforceable from day one.”
The timing of Hungary’s crackdown is especially problematic, as MiCA, the EU’s new crypto regulation, also took effect on July 1. While MiCA seeks to harmonize crypto rules across Europe and foster innovation, Hungary’s extreme stance risks isolating the country from its EU peers.
Capital flight and startup exodus
The first major response came from Revolut, the London-based digital bank with over 2 million Hungarian clients. It has immediately suspended all crypto-related services in Hungary, including buying, staking, and deposits.
Users can still sell assets and withdraw some tokens to external wallets, but no timeline has been announced for reinstating services. Revolut’s other banking services remain active.
As we wrote, Cyprus blocks 19 unauthorized crypto brokers
