Hungary’s newly updated laws on cryptocurrency trading could have a negative impact on the domestic crypto market, according to the Blockchain Hungary Association.
Kornél Kalocsai, the association’s president, was largely welcoming of the updated criminal code while speaking with Decrypt. The new regulations impose penalties for the operation and use of unlicensed cryptocurrency exchanges.
These include as many as five years in prison for investors who trade in excess of $1.45 million (or 500 million forints), while cryptocurrency service providers could face as many as eight years of incarceration.
The update has already prompted Revolut to cease providing crypto-trading services in Hungary, yet Kalocsai argues that the new code does not, in itself, “push out” legally operating exchanges and platforms, and is instead targeting illegal and unlicensed operations.’
“The law aims to strengthen legal certainty, enhance transparency, and support providers that comply with EU and domestic regulations—such as the MiCA Regulation and AML requirements,” he said.
However, Kolocsai acknowledges that the code has only been adopted at the statutory level so far, and that the final text of its implementation decree hasn’t been shared.
As such, it could prove stricter than anticipated, which could have unfortunate consequences for Hungary’s cryptocurrency market.
“If the decree turns out to be overly strict or contradictory, it could discourage domestic players and lead to a short-term contraction of the market,” he said. “Therefore, clarifying the legal text and ensuring transparent communication are essential to prevent market participants from leaving the country and instead encourage them to pursue compliant operations.”
The Supervisory Authority for Regulated Activities also hasn’t yet published guidelines on how to apply for licensing. That’s likely spiked uncertainty among local firms.
Despite the uncertainty, Kalocsai argues against any strong claim that the updated criminal code will have a chilling effect on Hungary’s crypto industry.
“The goal of the amendment is to steer actors away from underground or unregulated operations and toward the regulated market,” he explained. “The new criminal law provisions do not prohibit the use or trading of cryptocurrencies, but rather target the unauthorized provision of services.”
The updated code doesn’t alter the legal status of cryptocurrencies, which remain legal to hold. And it doesn’t apply to transfers below $14,250, or 5 million forints.
“The law specifically targets service activity,” Kalocsai added, “for example, people who regularly advertise crypto exchange services to others in exchange for a fee or commission.”
Some complications may be produced for entities operating on a peer-to-peer basis, since depending on the exact scope of the implementation decree, they may be required to reorganize into formal business structures or find alternative legal setups.
Going forward, Kalocsai expects that investors will be able to use international exchanges that comply with the EU’s MiCA rules or that will register in Hungary as soon as the licensing framework is shared.
“The main risk at this stage is the lack of clear communication regarding who qualifies as a service provider and how key terms like ‘business activity’ or ‘currency exchange’ will be interpreted in practice—even though MiCA already defines these terms at the EU level,” he says, adding that the implementation decree will need to clarify these points.
Ultimately, Kalocsai reiterates that crypto-exchanges already licensed in the EU will also be able to operate in Hungary once the MiCA Regulation enters into full effect, which it should do by 2026.
“For example, an exchange licensed in France or Germany could operate in Hungary if it complies with local registration or notification obligations,” he explains.
