Hungary Slams Crypto Traders with Prison Threats—Here’s What You Need to Know

Budapest throws the book at crypto—traders now face jail time under harsh new laws. A draconian move or necessary crackdown? The debate rages.

Hungary’s financial regulators—never known for their love of decentralization—just dropped the hammer. No warnings, no grace period. Straight to handcuffs.

Meanwhile, traditional banks smirk as another 'disruptive' threat gets shackled by bureaucracy. Some things never change.

TLDR

• Hungary’s new Criminal Code imposes up to 2 years prison for using unauthorized crypto exchanges
• Service providers face up to 8 years in prison for operating without licenses
• Prison sentences increase based on trading value, with highest penalties for trades over $1.46 million
• Major platforms like Revolut and Bitstamp have suspended crypto services for Hungarian users
• The Hungarian National Bank must approve all crypto service providers, but licensing procedures remain unpublished

Hungary has enacted strict cryptocurrency regulations that criminalize trading on unauthorized exchanges. The new laws went into effect on July 1, 2025.

The updated Criminal Code targets both users and providers of unauthorized crypto services. Individuals using unlicensed exchanges face up to two years in prison for trades between $14,600 and $145,950.

Prison sentences increase with trading volume. Users conducting trades worth $145,950 to $1.46 million face up to three years imprisonment. Those trading over $1.46 million could receive five-year sentences.

Service Providers Face Harsher Penalties

Service providers operating without proper authorization face even more severe consequences. Those running unauthorized crypto exchanges for trades up to $145,950 could receive three years in prison.

The penalties escalate for higher-value operations. Providers handling trades worth $145,950 to $1.46 million face up to five years imprisonment. Those dealing with trades exceeding $1.46 million could receive eight-year sentences.

The Hungarian National Bank now oversees crypto sector regulation. All crypto service providers must obtain licenses from the central bank to operate legally in Hungary.

Major Platforms Suspend Services

Several international platforms have responded by suspending services for Hungarian users. Revolut initially pulled all crypto services from Hungary, citing the new legislation.

The UK-based fintech company later restored crypto withdrawals only. Revolut stated its EU division is working to obtain proper crypto licensing within the European Union.

Regulatory Uncertainty Persists

The Supervisory Authority for Regulated Activities has 60 days to develop compliance frameworks. However, no guidance exists for companies during this transition period.

This regulatory gap has created confusion for crypto companies serving Hungarian customers. An estimated 500,000 Hungarians own digital assets, creating a legal grey area for existing users.

Holding Bitcoin and other cryptocurrencies remains legal under the new rules. The restrictions specifically target trading activities on unauthorized platforms.

Hungarian regulators claim the rules align with the EU’s Markets in Crypto-Assets framework. The new law adds extra safeguards, including mandatory conversion-validation certificates for each trade.

Industry critics argue the penalties exceed those outlined in MiCA regulations. Some suggest the harsh punishments appear designed to eliminate crypto trading rather than regulate it.

Officials have not provided a timeline for releasing licensing criteria. This leaves domestic firms unable to pursue compliance and global exchanges without a clear path to authorization.