Hungary's new crackdown on crypto sparks turmoil in the sector

By ramontomeydw // 2025-07-15

Mastodon

Parler

Gab

Copy

Hungary's new laws (effective July 1) impose prison sentences of up to eight years for trading cryptocurrencies on unauthorized exchanges, with penalties scaling based on transaction amounts (e.g., two years for trades over $14,595).
The legislation diverges from the EU's harmonized MiCA framework, leaving compliance unclear. Hungary's Supervisory Authority has 60 days to clarify rules, causing market upheaval and service suspensions (e.g., Revolut and Bitstamp halted operations).
Critics allege the crackdown targets tech-savvy demographics opposed to PM Orban's government, risking prosecution for ordinary investors and leaving 500,000 crypto holders in legal limbo.
The Hungarian National Bank excluded cryptocurrencies from national reserves on July 3, citing volatility and regulatory risks. It favored traditional assets like gold for stability.
Budapest's isolationist approach conflicts with Brussels' push for unified crypto regulations, raising concerns about fintech exodus and stifling innovation in Hungary's crypto sector.

In a sweeping move that has rattled Hungary's cryptocurrency sector, new laws took effect July 1 imposing prison sentences of up to eight years for trading digital assets on unauthorized exchanges. Under the new laws, individuals face up to two years in prison for trading through unlicensed exchanges involving sums between five million Hungarian forints ($14,595) and 50 million forints ($145,950). Penalties escalate to three years for trades exceeding 50 million forints ($145,950) and five years for those over 500 million forints ($1.46 million). The legislation, part of Hungary's updated Criminal Code, marks one of Europe's strictest crypto crackdowns. It diverges sharply from the European Union's strategy to harmonize regulations under the Markets in Crypto-Assets (MiCA) framework, which also launched on the same day Budapest's new crypto laws took effect. (Related: Vietnam becomes first country to enact comprehensive law regulating the digital technology industry.) Moreover, service providers operating without approval risk up to eight years behind bars. However, no clear compliance guidelines are available from Hungary's Supervisory Authority for Regulatory Affairs (SZTFH), which has 60 days to clarify enforcement rules. The abrupt policy shift has plunged the market into chaos. London-based Revolut – serving over two million Hungarian users – suspended all crypto purchases, deposits, staking and withdrawals to external wallets. Bitstamp, another major exchange, also paused services for Hungarian residents. Revolut cited "recent Hungarian legislation" forced the halt, adding that it is pursuing EU-wide licensing under MiCA. The company admitted that it faces hurdles due to Budapest's additional national requirements. Revolut later permitted withdrawals on Monday, July 14.

Budapest vs. Bitcoin: Vague rules could criminalize regular users

Critics warn the vague rules could criminalize ordinary investors. "Regular users could be prosecuted simply for managing their investments the same way they always have," an insider told Hungarian news outlet Telex. Approximately 500,000 Hungarians hold crypto declared as legal income, but the lack of transitional guidance leaves past or ongoing transactions in jeopardy. Analysts see the crackdown as politically driven, targeting urban, tech-savvy demographics less aligned with Hungarian Prime Minister Viktor Orban's ruling Fidesz party. The Hungarian National Bank (MNB) further distanced itself from the sector on July 3, announcing it will exclude cryptocurrencies from national reserves. It cited crypto's volatility and regulatory risks, opting instead for traditional assets like gold. "We must prioritize stability and reliability in our reserve holdings," the MNB reiterated. While foreign platforms may continue operating with limited consequences, domestic firms and users now navigate a minefield of legal uncertainty. Budapest's isolationist approach clashes with Brussels' push for unified crypto standards, fueling fears of a fintech exodus. As SZTFH rushes to draft compliance rules, Hungary's crypto community braces for a prolonged period of turbulence – one where privacy, innovation and financial autonomy hang in the balance. Head over to CryptoCult.news for more similar stories. Watch the Health Ranger Mike Adams and Todd Pitner discussing crypto and financial freedom in this clip. This video is from the Brighteon Highlights channel on Brighteon.com.

CITIZENS NEWS

Budapest vs. Bitcoin: Vague rules could criminalize regular users

More related stories: