Hungary Bans Unauthorized Crypto Trading with Prison Terms
Hungary updated its criminal code on July 1, imposing prison sentences for unauthorized crypto trading. These penalties target unauthorized crypto trading on unlicensed exchanges. Individuals face up to two years in prison for trades between HUF 5 million and 50 million, three years for HUF 50 million–500 million and five years for trades above HUF 500 million. Unlicensed service providers risk up to three years for transactions under HUF 50 million, up to five years for HUF 50 million–500 million and eight years for larger amounts. The Financial Supervisory Authority (SZTFH) has 60 days to issue a compliance framework. No guidelines are yet available, creating uncertainty among crypto firms. Fintech firm Revolut briefly paused Hungarian crypto services but has since restored withdrawals while pursuing an EU-wide license. Traders should monitor how these stricter rules may affect market access, liquidity and compliance strategies.
Bearish
In the short term, the introduction of prison penalties for unauthorized crypto trading is likely to deter activity on unlicensed platforms, reducing trading volumes and liquidity in Hungary’s crypto market. Regulatory uncertainty—due to the lack of clear compliance guidelines—may also prompt firms to pause local services or delay expansion, further weighing on market access. Over the longer term, the focus on strict enforcement could bolster licensed exchanges and drive a shift toward regulated trading venues. However, added compliance costs and legal risks may dampen enthusiasm among traders and service providers, making overall sentiment more cautious.