Hungary’s new cryptocurrency laws, which took effect on July 1, have shocked many. These laws make unauthorized trading illegal and come with strict penalties. Individuals could face up to five years in prison, while service providers might face up to eight years for not following the rules. This unclear legislation affects around 500,000 Hungarian crypto holders.
Hungary’s New Laws Target Unlicensed Firms
Hungary’s parliament passed the law on June 17, 2025, and it changes the Criminal Code to regulate crypto transactions more strictly. It creates two new crimes: “abuse of crypto assets” and “unauthorized crypto exchange services.” These laws target both users and companies.
The government claims the laws are meant to prevent money laundering and align with EU regulations. However, the lack of clear rules has led to confusion, similar to India’s 2018 crypto ban, which restricted trading but was later overturned. Unlike India’s temporary ban, Hungary’s laws impose much tougher penalties, which could hurt the economy.
Crypto Companies React to New Laws
These laws affect not just individuals but also fintech companies in Hungary. Revolut, which serves over two million Hungarian users, has stopped offering crypto purchases, staking, and deposits due to the uncertainty about regulations. Major exchanges like Binance and Coinbase continue operating, but local firm CoinCash has paused new registrations.
The harsh penalties mean that even small transactions, as low as $14,000, could lead to prison time. This situation has caused fear among users and businesses. Many critics believe that the unclear rules and severe penalties will stifle Hungary’s growing crypto sector.
Globally, Hungary’s strict crypto laws stand out when compared to more lenient regulations in other countries. For example, Crypto trading and lending platform Nexo recently announced its return to the United States, marking the end of a nearly three-year pause that began during its regulatory hurdles in late 2022.
Similarly, Pakistan has taken a strategic step to adopt cryptocurrencies by establishing a regulatory framework. This move aims to attract international investors and create economic opportunities in the digital finance sector, similar to initiatives taken by several other countries.
As companies consider whether to stay or move, Hungary may risk losing its share of the cryptocurrency market.
