Hungary has enacted laws that could impose imprisonment on individuals engaging in crypto transactions through an unauthorized cryptocurrency exchange.
Those utilizing a so-called “unauthorized crypto-asset exchange service” may face a maximum of two years in prison, with penalties escalating based on the traded amount, as indicated by an amendment to the nation’s Criminal Code that took effect on July 1.
The modified statutes also target unauthorized crypto service providers with a potential prison sentence of up to three years, which may increase depending on the value of illegal transactions.
Local media outlet Telex reported on July 1 that these laws have caused confusion amongst crypto companies operating in the country, as Hungary’s Supervisory Authority for Regulatory Affairs (SZTFH) has 60 days to create compliance frameworks for the regulations, yet no guidance is available in the interim.
New law for “misuse of crypto-assets”
The initial modification to Hungary’s Criminal Code imposes a sanction of up to two years in prison if an unauthorized crypto exchange is employed for transactions between 5 million to 50 million forints ($14,600 to $145,950).
This sanction escalates to a maximum of three years if the crime involves “a particularly substantial amount” ranging from 50 million to 500 million forints ($145,950 to $1.46 million).
Violations exceeding 500 million forints can incur a penalty of up to five years.
“Unauthorized” crypto exchanges now a criminal offense
The secondary amendment pertaining to crypto stipulates up to three years of incarceration for those offering unauthorized “crypto-asset exchange service activities” for amounts up to 50 million forints ($145,950).
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The increases in penalties mirror those for unauthorized exchange usage, with crypto service providers facing sentences of up to five years for offenses involving amounts up to 500 million forints ($1.46 million) and up to eight years for those surpassing 500 million forints.
Revolut ceases, then restores some cryptocurrency services
Earlier this month, local outlet Portfolio reported that the UK-based fintech entity Revolut suspended its services in Hungary due to the new laws.
A segment of Revolut’s Hungarian website stated that it had halted all crypto-related services within the country — including withdrawals from the platform — owing to “recently implemented Hungarian legislation,” and lacked a definite timeline for the resumption of services.
Nonetheless, Portfolio reported on Monday that Revolut had reinstated crypto withdrawals only. The company also indicated that its EU division is pursuing a cryptocurrency license within the EU.
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