Hungary Cracks Down: Unauthorized Crypto Trading Now a Criminal Offense – Major Exchanges on High Alert
Hungary just flipped the script on crypto traders—unauthorized transactions now carry criminal penalties. The move sends shockwaves through the market as major platforms scramble to adjust.
The new rules: No more gray-area OTC deals or peer-to-peer swaps without government approval. Budapest’s hardline stance mirrors broader EU regulatory trends—but with sharper teeth.
Exchange reactions: Top platforms freeze new user onboarding while legal teams dissect the fine print. Liquidity takes a hit as traders brace for KYC avalanches.
The irony? Same regulators who missed the 2008 financial crisis now ‘protect’ citizens from decentralized ledgers. Classic bureaucratic theater.
One thing’s clear: Hungary won’t be the last to weaponize compliance. Crypto’s wild west era is getting fenced in—one jurisdiction at a time.
The law forces major platforms like Revolut and Bitstamp to suspend services, leaving 500,000 crypto holders unable to legally trade their assets.
Prison Time for Trading Crypto
Hungary’s parliament passed legislation in June adding two new crimes to the criminal code. The first targets people who use unlicensed crypto exchanges. The second targets companies that run unauthorized crypto services.
Individual users face serious jail time. Trading through unlicensed platforms can mean up to two years in prison. For transactions worth more than 50 million Hungarian forints ($146,000), sentences jump to three years. The harshest penalties—up to five years—apply to trades exceeding 500 million forints ($1.46 million).
Companies face worse punishment. CMS Law reports that executives running unlicensed crypto exchanges could get up to eight years in prison.
Revolut Suspends Then Partially Restores Services
Revolut initially suspended crypto services for its 2 million Hungarian customers on July 4, then completely froze all crypto holdings on July 7. However, crypto withdrawals became available again on July 14, though new purchases and deposits remain blocked.
According to initial reports, users could still sell existing crypto assets and transfer certain tokens to external wallets during the partial suspension.
Bitstamp also reportedly halted services for Hungarian residents, citing legal uncertainty and fine risks, though the company has not made official announcements about the status of its Hungarian operations.
Current Status: Partial Service Restoration
As of July 14, 2025, Revolut has restored crypto withdrawal capabilities for Hungarian users, though new purchases and deposits remain blocked. The company adapted to Hungary’s regulatory environment but hasn’t announced when full services will resume.
Hungarian crypto companies like CoinCash paused new customer registrations but continue serving existing users. International exchanges Binance, Coinbase, and Kraken continue operations, citing their EU-level licensing under the Markets in Crypto-Assets (MiCA) regulation.
No Legal Way to Get Licensed
The Hungarian National Bank (MNB) now controls crypto licensing, but the Supervisory Authority for Regulated Activities hasn’t published application procedures. This creates an impossible situation where crypto trading becomes illegal but no legal path exists for compliance.
The law requires a special “conversion-validation certificate” for each trade—a requirement that goes beyond EU standards. Companies that operated before December 30, 2024, had until July 1, 2025, to get proper licensing, according to legal experts at Wolf Theiss.
But the validation system demands extensive checks on crypto origins, wallet ownership verification, and identity checks for all participants. No such validation service providers exist because authorities haven’t established the licensing framework.
Hungary Breaks from EU Rules
Hungary’s approach differs from the European Union’s MiCA regulation, which focuses on administrative penalties rather than criminal sanctions. Most EU countries handle crypto rules through fines and license revocations, not prison sentences.
The EU’s MiCA framework aims to create unified crypto rules across member states. But Hungary added criminal penalties and extra requirements that exceed EU minimums.
Legal experts describe Hungary’s law as creating “a more centralized and restrained transaction scheme tainted by possible criminal sanctions,” according to CMS Hungary’s analysis. Industry observers worry the harsh penalties are designed to discourage trading rather than create clear regulation.
500,000 Crypto Holders Trapped
About 500,000 Hungarians own cryptocurrencies, many bought with legally taxed income. These people now face a legal paradox: they can legally own crypto but cannot legally sell or exchange it without risking criminal penalties.
Hungarian crypto holders are trapped with assets they cannot legally convert to traditional currency. Some users report considering moving assets to foreign exchanges or waiting for regulatory clarity.
The disruption goes beyond individual users. Hungarian fintech companies reportedly consider relocating to crypto-friendly jurisdictions like Hong Kong, Dubai, or Singapore. This brain drain could hurt Hungary’s technology sector development.
Trademagazin reported that the timing and lack of implementation rules suggest the government may be sending a political signal that “playing with crypto” is no longer welcome.
Where Things Stand
Hungary’s crypto crackdown represents one of the world’s strictest approaches to digital asset regulation. While owning cryptocurrency remains legal, the practical impossibility of trading has frozen the country’s crypto market until authorities provide clear compliance pathways.
