Hungary Imposes Prison Sentences for Unauthorized Cryptocurrency Trading

Hungary has enacted stringent cryptocurrency regulations that could result in significant prison sentences for individuals and businesses operating without proper authorization. The new laws, which took effect on July 1, 2025, represent a major shift in the country's approach to cryptocurrency regulation.

New Criminal Penalties for Unauthorized Crypto Exchange Use

Under the updated Hungarian Criminal Code, individuals who use unauthorized cryptocurrency exchange services face severe penalties. The punishment structure is based on the value of transactions conducted through these unauthorized platforms.

For trades valued between 5 million and 50 million forints (approximately $14,600 to $145,950), offenders face up to two years in prison. The penalties escalate significantly for higher-value transactions.

When trades reach "particularly large values" between 50 million and 500 million forints ($145,950 to $1.46 million), the potential prison sentence increases to three years. For transactions exceeding 500 million forints, offenders could face up to five years imprisonment.

Stricter Penalties for Unauthorized Service Providers

The legislation targets cryptocurrency service providers even more severely than individual users. Unauthorized crypto-asset exchange service providers face up to three years in prison for activities involving up to 50 million forints ($145,950).

The penalty structure for service providers follows a similar escalation pattern. For offenses involving amounts up to 500 million forints ($1.46 million), providers face up to five years imprisonment. The most severe penalty applies to offenses exceeding 500 million forints, which carry potential sentences of up to eight years.

Regulatory Confusion and Implementation Challenges

The implementation of these laws has created significant confusion within Hungary's cryptocurrency sector. The Hungarian Supervisory Authority for Regulatory Affairs (SZTFH) has been given 60 days to develop compliance frameworks for the new regulations. However, no guidance currently exists for companies operating in the interim period.

Local news sources report that cryptocurrency companies serving Hungary are struggling to understand how to comply with the new requirements while the regulatory framework remains undefined.

Impact on Major Cryptocurrency Platforms

The regulatory changes have already affected major cryptocurrency platforms operating in Hungary. Revolut, the UK-based fintech company, initially suspended all cryptocurrency-related services in the country following the law's implementation.

The company's Hungarian website initially stated that all crypto services, including withdrawals from the platform, had been stopped due to the "recently introduced Hungarian legislation." Revolut provided no timeline for service restoration at that time.

However, recent developments show some progress. As of July 14, 2025, Revolut has restored cryptocurrency withdrawal services, though other crypto-related features remain suspended. The company has indicated that its EU division is working toward obtaining proper cryptocurrency licensing within the European Union.

Legal Framework and Criminal Code Updates

The new regulations represent two significant updates to Hungary's Criminal Code. The first update specifically addresses the "abuse of crypto-assets" by individual users, while the second targets unauthorized cryptocurrency service providers.

These laws establish clear criminal penalties for cryptocurrency-related activities conducted without proper authorization. The legislation appears designed to enforce compliance with Hungary's emerging cryptocurrency regulatory framework.

Industry Response and Future Outlook

The cryptocurrency industry in Hungary faces a challenging adaptation period as companies work to understand and comply with the new legal requirements. The lack of clear guidance during the 60-day framework development period has created uncertainty for businesses and users alike.

Companies operating in Hungary's cryptocurrency sector must now navigate the complex process of ensuring they meet authorization requirements while the regulatory framework continues to evolve. The experience of major platforms like Revolut demonstrates the significant operational challenges these laws present.

Conclusion

Hungary's new cryptocurrency laws represent one of the most stringent regulatory approaches in Europe, with criminal penalties of up to eight years for unauthorized service providers. As the regulatory framework develops over the coming months, the cryptocurrency industry will need to adapt to these strict compliance requirements while navigating the uncertainty of incomplete guidance from Hungarian authorities.

The impact of these laws extends beyond Hungary's borders, as international companies must now consider the regulatory implications of serving Hungarian customers. The situation continues to evolve as regulatory authorities work to establish clear compliance frameworks for the cryptocurrency sector.