Hungary Criminalizes Unlicensed Crypto Exchanges with Up to 8-Year Jail Terms

Hungary has moved to enforce one of the most stringent regulatory regimes for cryptocurrencies in the European Union by criminalizing the use and operation of unlicensed crypto exchanges. Under the newly enacted law, effective July 1, 2025, both users and service providers engaging in crypto transactions outside of licensed platforms face severe penalties, including prison sentences of up to two years. The law also escalates the maximum penalties based on transaction value, with users facing up to five years in prison and service providers up to eight years for transactions exceeding 500 million Hungarian forint [1].

The law mandates that all crypto activity must occur through officially licensed service providers, yet, at the time of implementation, no public licensing framework or list of approved platforms was provided [1]. This regulatory ambiguity has left market participants—ranging from individual users to institutional investors and crypto platforms—in a legal gray area. Hungary’s financial regulator, the Supervisory Authority for Regulated Activities (SZTFH), has 60 days from the law’s effective date to issue detailed guidance on the licensing process. Until then, the lack of clarity raises the risk of unintentional legal violations, particularly for users who may be unaware of the new restrictions [1].

The regulatory shift appears to be an effort to align with the broader EU Markets in Crypto-Assets (MiCA) framework, which aims to harmonize crypto regulations across the bloc. However, unlike other EU member states, Hungary has introduced criminal penalties without a clear licensing system, creating a stark divergence in enforcement. The National Bank of Hungary was designated to oversee compliance and licensing under the new law, but the absence of operational guidance has led to uncertainty in the market [1].

Responses from international crypto firms have been varied. Revolut, a UK-based fintech company, immediately suspended all services in Hungary, interpreting the new law as an effective de facto ban. Bitstamp paused trading for Hungarian users but allowed deposits and withdrawals. Meanwhile, major exchanges such as Binance, Coinbase, and Kraken have continued operations, with Coinbase and Kraken having secured MiCA licenses earlier in June 2025 [1]. In addition, local crypto firm CoinCash halted the onboarding of new users, though it continues to support existing clients, reflecting the cautious stance taken by market participants in the face of regulatory uncertainty [1].

The law’s unclear implementation has sparked concerns among industry observers, who argue it could undermine the goals of MiCA, which was intended to reduce regulatory fragmentation and bring legal clarity to the EU’s crypto market. By imposing criminal penalties without a functioning compliance framework, Hungary has inadvertently created a legal environment where both users and service providers face potential liability [1].

The situation also raises broader questions about the challenges of regulating fast-moving financial technologies. While the Hungarian government aims to protect consumers and maintain financial stability, the absence of a clear compliance pathway risks stifling innovation and driving crypto activity underground. The coming months will be crucial in determining whether the law will be effectively enforced or adjusted to provide more clarity for market participants [1].

The new regulations highlight the growing importance of aligning national legislation with EU-wide initiatives, while also emphasizing the need for clear and accessible regulatory guidance. As Hungary continues its regulatory rollout, the market will be closely watching for any further developments from the SZTFH or the National Bank of Hungary [1].

---

Source: [1] title1.............................(https://cointelegraph.com/learn/articles/hungary-crypto-crackdown-face-2-years-in-jail)