Under newly enacted legislation in Hungary, digital asset traders using “unauthorized” cryptocurrency exchanges could face up to two years in prison, with harsher penalties for larger transactions.
Crypto Firms Eye Exit Amidst Legal Uncertainty
Hungarian digital asset traders using “unauthorized” cryptocurrency exchanges face up to two years in prison under newly enacted legislation. Those conducting trades exceeding $140,000 (50 million forints) face an additional year, while transactions above $1.4 million could lead to sentences of up to five years.
According to a Forbes report, operators of unauthorized cryptocurrency platforms could face prison terms of up to eight years. The introduction of two criminal offenses in Hungary’s updated criminal code has rattled fintech firms, including U.K.-based digital bank Revolut. In a statement announcing a service suspension, Revolut said recent legislative changes prompted the decision.
The digital bank did not provide a timeline for resuming normal services but assured users they would receive updates when more information was made available.
Meanwhile, a local publication reported that local observers fear the enforcement of the law could trigger an exodus of crypto firms, potentially affecting an estimated 500,000 Hungarian users. According to Forbes, citing anonymous industry sources, several Hungarian companies are already considering relocating to more crypto-friendly jurisdictions in the Baltics or elsewhere in Europe.
Still, a segment of industry professionals maintains a strong sense of optimism. These analysts and market participants contend that the government harbors no intention of abruptly severing access for hundreds of thousands of users, recognizing the likely public backlash and economic ramifications such a drastic measure could provoke.
Furthermore, there is growing speculation that Hungary’s ruling Fidesz party will likely avoid any actions perceived as disrupting personal wealth, particularly in the sensitive period leading up to the upcoming national election, prioritizing voter sentiment and stability.
While Hungarian-registered companies and individual investors face legal uncertainty, the legislation reportedly allows foreign platforms such as Coinbase and Binance to continue operating. The Hungarian crypto community is now reportedly seeking clarification from regulators, though no official guidance has been issued.
As a result, players in Hungary’s crypto sector face difficult decisions: suspend operations, move abroad, or risk violating criminal law while awaiting clearer regulations. This stands in contrast to other European nations promoting cryptocurrency innovation—potentially isolating Hungary within the EU on digital asset regulation.
Source: Bitcoin
