Hungarian legislation that went into effect this month criminalizes cryptocurrency trading
PANews reported on July 14 that, according to Forbes, Hungary has enacted one of the world's strictest cryptocurrency legislations, which has caused widespread confusion and concern in the fintech field after it came into effect on July 1. The new regulations have forced large fintech companies to suspend services, such as the digital bank Revolut, which announced the "immediate suspension of cryptocurrency services in Hungary". The new legislation introduces two criminal offenses: 1. Severe penalties for the use of unauthorized services and operators (for basic transactions, they will face up to two years in prison; for "particularly high value" transactions of more than 50 million Hungarian forints, they will face up to three years in prison; for transactions exceeding 500 million forints, they will face up to five years in prison); 2. Service providers who operate without proper authorization will face more severe penalties, and larger operations may be sentenced to eight years in prison.
The bill is broadly worded and lacks implementation guidelines. About 500,000 citizens who purchase coins may be affected, and originally legal activities may face criminal prosecution. The regulatory authority has 60 days to develop a compliance framework, but has not issued any guidance. Regulatory uncertainty may lead to the withdrawal of companies, and some companies are already considering moving elsewhere. Although it is unlikely to enforce the law against global platforms, Hungarian registered companies and individual investors face huge legal uncertainty. The cryptocurrency community is waiting for clarification from regulators, and industry groups have not yet received an official response. The industry faces a difficult choice, and Hungary's move may isolate it from EU digital asset regulation.
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