Hungary’s Crackdown on Unauthorized Crypto Trading Threatens 8 Years in Prison
Hungary has recently introduced stringent legislation that criminalizes trading cryptocurrencies on unlicensed platforms, imposing penalties of up to 8 years in prison. This move has sent shockwaves through the fintech industry, leading to major players like Revolut freezing crypto services in the country.
The Legal Landscape in Hungary
Under the updated Criminal Code, Hungary has defined two new offenses related to cryptocurrencies: “abuse of crypto assets” and “providing unauthorized crypto asset exchange services.” Individuals found trading on unlicensed exchanges could face imprisonment, with penalties escalating based on transaction size.
Challenges for Fintech Companies
The regulatory changes in Hungary have created legal uncertainty, with businesses and investors struggling to navigate the new framework. Compliance requirements, including the need for transactions to be validated by an authorized entity, have added complexity to the crypto landscape in the country.
Revolut’s Response and Compliance Challenges
Revolut, a prominent neobank with a significant user base in Hungary, has temporarily halted its crypto services to ensure compliance with the evolving regulatory environment. The company is working towards obtaining the necessary licenses to resume operations in Hungary.
EU Regulations vs. Hungarian Approach
Hungary’s strict stance on crypto trading contrasts with the EU’s efforts to establish unified regulations through the Markets in Crypto Assets (MiCA) policy. While the EU aims for harmonization, Hungary’s divergent approach has raised concerns about legal clarity and innovation within the fintech sector.
Impact on the Hungarian Market
Local users and businesses face potential legal repercussions under the new laws, while international exchanges may continue to serve Hungarian customers with limited consequences. The Hungarian Reserve Bank’s decision to exclude cryptocurrencies from its reserves further underscores the challenging environment for crypto in the country.
Overall, Hungary’s crackdown on unauthorized crypto trading reflects a broader trend of regulatory tightening and highlights the complexities facing both industry players and investors in the evolving crypto landscape.
