Hungary Imposes Harsh Penalties on Unauthorized Crypto Exchanges

Hungary has enacted stringent new cryptocurrency regulations that criminalize both the operation and use of unauthorized crypto exchanges. These laws, which took effect on July 1, 2025, impose severe penalties on individuals and service providers involved in unauthorized crypto activities. The regulatory changes have created significant confusion and uncertainty in the market, as the Supervisory Authority for Regulatory Affairs (SZTFH) has a 60-day period to develop compliance frameworks, leaving a legal gray area in the interim.

Under the new legislation, individuals caught trading cryptocurrencies through unauthorized exchanges face imprisonment ranging from two to five years, depending on the transaction value. For transactions between 5 million and 50 million forints ($14,600 to $145,950), the penalty is up to two years in prison. This increases to three years for trades between 50 million and 500 million forints ($145,950 to $1.46 million), and up to five years for transactions exceeding 500 million forints. Service providers operating unauthorized exchanges face even harsher penalties, with imprisonment ranging from three to eight years based on the transaction value.

The regulatory changes have disrupted access to the crypto market for an estimated 500,000 Hungarians who own digital assets. While holding cryptocurrencies remains legal, the trading restrictions have left many users and companies in a state of uncertainty. International crypto platforms, including Revolut and Bitstamp, have suspended services in Hungary due to the new legislation. These platforms are awaiting clear licensing procedures before resuming operations, leaving many to exit the market temporarily or permanently.

The Hungarian National Bank has been tasked with policing the sector and ensuring that all crypto service providers obtain a license to operate legally. The new laws align with the EU’s Markets in Crypto-Assets (MiCA) framework but include additional safeguards, such as a mandatory “conversion-validation certificate” for each trade. Critics within the industry argue that the penalties are far harsher than those outlined in MiCA, suggesting that the rules may be designed to discourage trading entirely rather than regulate it effectively.

The speed of implementation, combined with the lack of regulatory guidance, has created significant challenges for both domestic firms and global exchanges. The absence of a licensing window and the harsh penalties have left the industry in a continued state of uncertainty. For now, the safest option for Hungarian crypto holders appears to be holding assets without trading or ensuring they only use platforms that have obtained proper authorization, once such authorizations become available.