A regulatory sledgehammer has descended upon Hungary’s cryptocurrency landscape, as the nation’s draconian new crypto law took effect on July 1, 2025, transforming what was once a civil matter into a criminal enterprise punishable by up to eight years in prison.
The legislation, which amends both the Hungarian Criminal Code and the Crypto Act, criminalizes trading on unauthorized crypto-asset exchange services while aligning with the Markets in Crypto-Assets Regulation (MiCA) and Act VII of 2024.
Hungary’s criminal code weaponizes justice against unauthorized crypto trading, transforming digital asset transactions into potential felonies punishable by imprisonment.
The penalties escalate with algorithmic precision based on transaction volumes, creating a tiered system that would make medieval punishment schemes seem quaint. Individual traders face up to two years imprisonment for transactions between 5 million and 50 million forints (~$14,600 to $145,950), while those dabbling in 50 million to 500 million forints risk three years behind bars.
The truly ambitious traders exceeding 500 million forints confront five years of state hospitality. Service providers receive even harsher treatment, with unauthorized operators handling up to 50 million forints facing three years imprisonment.
The penalties escalate to five years for volumes between 50 million and 500 million forints, while those managing over 500 million forints risk eight years incarceration—a sentence that transforms cryptocurrency entrepreneurship into a high-stakes gamble with one’s freedom.
The law introduces two new criminal offenses: “abuse of cryptocurrencies” and “provision of unauthorized cryptocurrency exchange services,” both triggered when exchanged amounts reach or exceed 5 million forints.
Crypto exchanges must now obtain compliance certificates from authorized validators, rendering transactions without such certification legally ineffective—a bureaucratic death sentence for unauthorized trading. The validation process includes examining the origin of crypto-assets, verifying device ownership, and conducting profile-based assessments of associated persons.
The immediate market response has been predictably chaotic. Fintech companies like Revolut suspended crypto services in Hungary, citing regulatory uncertainty that emerged from the legislation’s implementation without immediate compliance guidelines.
Hungary’s Supervisory Authority has been granted 60 days to develop regulatory frameworks post-enactment, creating a legal vacuum that has triggered widespread concern among investors and users.
This regulatory approach represents Hungary’s uncompromising intent to control crypto markets through criminal law rather than traditional financial regulation, effectively weaponizing the justice system against unauthorized digital asset activity. In contrast, the United States has taken a more measured approach with the GENIUS Act, which establishes a comprehensive federal framework for stablecoins while focusing on consumer protection through reserve backing requirements rather than criminal penalties.
