While most European Union nations have embraced the Markets in Crypto-Assets Regulation (MiCA) as a framework for balanced cryptocurrency oversight, Hungary has charted a decidedly more draconian course—one that transforms routine crypto trading into a potential felony.
Effective July 1, 2025, Hungary’s updated criminal code criminalizes trading on unauthorized crypto-asset exchange platforms, establishing prison sentences that scale with transaction volumes. The law targets both retail investors and service providers, creating what amounts to a two-tiered punishment system based on whether one merely trades unauthorized cryptocurrencies or facilitates such trading.
Hungary’s new criminal code transforms unauthorized crypto trading into a felony punishable by up to five years imprisonment.
For private traders, the penalties begin at 5 million forints (approximately $14,600)—hardly whale territory in today’s crypto markets. Trading volumes between 5 million and 50 million forints carry up to two years imprisonment, while amounts between 50 million and 500 million forints escalate to three years. Cross the 500 million forint threshold ($1.46 million), and traders face up to five years behind bars.
Service providers face even harsher consequences under this Byzantine framework. Operating without compliance certificates—mandatory validations issued by authorized entities—transforms crypto exchange services into criminal enterprises. Handling up to 50 million forints nets three years imprisonment, while processing up to 500 million forints carries five years. The ultimate penalty, eight years imprisonment, applies to providers handling over 500 million forints.
The regulatory architecture renders transactions without proper certificates legally invalid, creating a compliance minefield that has already triggered market exodus. The validation process requires examining the origin of crypto-assets and verifying device ownership as part of mandatory compliance procedures. Revolut suspended all crypto services in Hungary shortly after enforcement began, while numerous fintech companies contemplate retreating from the market entirely.
This legislative sledgehammer threatens approximately half a million Hungarian investors with potential criminal liability—a remarkable achievement in regulatory overreach that contrasts sharply with broader EU efforts toward unified, proportionate crypto oversight. The restrictive framework eliminates the financial inclusion opportunities that decentralized finance typically provides to underbanked populations.
The law introduces two distinct criminal offenses: “abuse of cryptocurrencies” and “provision of unauthorized cryptocurrency exchange services,” both carrying imprisonment as standard punishment.
Hungary’s approach represents perhaps the most restrictive cryptocurrency framework globally, transforming what neighboring countries treat as regulatory compliance issues into matters requiring criminal defense attorneys—a distinction that speaks volumes about divergent regulatory philosophies within the supposedly harmonized European market.
