PANews reported on July 14 that according to Forbes, Hungary has issued one of the world's strictest cryptocurrency legislations, which has caused widespread confusion and concern in the financial technology sector since its implementation on July 1. The new regulations have forced large financial technology companies to suspend services, such as digital bank Revolut announcing an "immediate suspension of cryptocurrency services in Hungary". The new legislation introduces two criminal offenses: 1. Severe penalties for using unauthorized services and operators (for basic transactions, facing up to two years in prison; for "particularly high-value" transactions over 50 million Hungarian forints, facing up to three years in prison; for transactions exceeding 500 million forints, facing up to five years in prison); 2. More severe penalties for service providers operating without proper authorization, with large-scale operations potentially facing eight years in prison.
The bill's broad wording and lack of implementation guidelines may affect approximately 500,000 cryptocurrency buyers, with previously legal activities potentially facing criminal prosecution. The regulatory body has 60 days to develop a compliance framework but has not issued guidance. Regulatory uncertainty may lead to companies' withdrawal, with some already considering relocation. While enforcement against global platforms is unlikely, Hungarian-registered companies and individual investors face significant legal uncertainty. The cryptocurrency community awaits clarification from regulatory authorities, with industry groups yet to receive official responses. The industry faces difficult choices, and Hungary's actions may isolate it in the EU's digital asset regulation.
