New Law Criminalizes Unlicensed Crypto Activity
Hungary has slammed the brakes on its crypto sector, passing a sweeping law on June 17 that criminalizes the use of unlicensed crypto exchanges and unauthorized high-value transactions. Effective from July 1, the law targets individual traders and service providers alike, introducing stiff prison sentences of up to five years for unauthorized users and up to eight years for non-compliant platforms.
According to the updated criminal code, any crypto transaction above 50 million Hungarian forints (approx. $146,000) is now deemed illegal if not executed through a licensed exchange. Trades over 500 million forints (around $1.46 million) carry even more severe consequences. While owning crypto like Bitcoin remains legal, using it under these new restrictions is a different story entirely.
Licensing Vacuum Leaves Market in Chaos
The law tasks the Hungarian National Bank with enforcing the new rules, giving it regulatory authority over the entire crypto sector. But despite the crackdown, no official path to licensing exists yet. The Supervisory Authority for Regulated Activities has not published any guidance or application procedures, leaving both domestic crypto businesses and global exchanges in limbo.
With no licensing framework available, exchanges like Revolut and Bitstamp have already halted crypto services for Hungarian users. The result is a frozen market where legal uncertainty and fear of criminal prosecution have displaced clarity or regulation.
Hungary Claims Alignment With EU—but Industry Pushes Back
Authorities insist the new law follows the EU’s Markets in Crypto-Assets (MiCA) framework, but critics argue the penalties go far beyond EU norms. One feature in the law, a mandatory “conversion-validation certificate” for every crypto transaction, is being criticized as burdensome and potentially unworkable.
Others in the industry have called out the law’s timing and lack of transparency, suggesting that Hungary is using regulatory uncertainty as a tool to drive out crypto activity rather than nurture it.
Over 500,000 Users Left in Legal Grey Zone
Estimates suggest that over half a million Hungarians currently own crypto, most of whom now face an unclear legal future. Although personal holding remains legal, any trading activity through unlicensed exchanges—essentially every available platform right now—could constitute a crime under the new law.
The lack of clarity is sending a chilling effect across the local market, with Hungarian users reporting suspended accounts and halted withdrawals as platforms scramble to assess their risk. Industry advocates are urging the government to immediately publish licensing procedures or risk long-term damage to Hungary’s standing in the digital asset world.
A Crypto Clampdown With Global Repercussions
This heavy-handed approach has caught the attention of global crypto watchers. While MiCA is intended to unify and stabilize crypto regulation across Europe, Hungary’s interpretation may set a precedent for how member states can overstep under the guise of compliance.
Without any response yet from the Hungarian National Bank on when or how the licensing regime will be implemented, the nation’s crypto ecosystem remains suspended in legal uncertainty—and its users hanging by a thread.
