Hungary has updated its Criminal Code, imposing potential prison sentences for those using or running unauthorized crypto exchanges.
Hungary has passed laws that could slap individuals trading crypto using an unauthorized crypto exchange with prison.
Those who use a so-called “unauthorized crypto-asset exchange service” could face up to two years in prison with penalties increasing based on the value traded, according to an update to the country’s Criminal Code that came into force on July 1.
The updated laws also target unauthorized crypto service providers with up to three years in prison, which could increase depending on the value of illicit trades.
Local news outlet Telex reported on July 1 that the laws have confused crypto companies serving the country, as Hungary’s Supervisory Authority for Regulatory Affairs (SZTFH) has 60 days to develop compliance frameworks for the laws, but no guidance exists in the meantime.
New law for “abuse of crypto-assets”
The first update to Hungary’s Criminal Code gives a penalty of up to two years in prison if an unauthorized crypto exchange is used to trade between 5 million to 50 million forints ($14,600 to $145,950).
That penalty rises to up to three years if the offence is of “a particularly large value” between 50 million and 500 million forints ($145,950 to $1.46 million).
Offences over 500 million forints can carry a penalty of up to five years.
“Unauthorized” crypto exchanges now a criminal offence
The second updated law around crypto gives up to three years in prison for those who provide unauthorized “crypto-asset exchange service activities” of up to 50 million forints ($145,950).
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The penalty increases are similar to the unauthorized exchange use laws, with crypto service providers hit with up to five years in prison for offences up to 500 million forints ($1.46 million) and up to eight years in prison for offences over 500 million forints.
Revolut pulls, then reinstates some crypto services
Earlier this month, local outlet Portfolio reported that the UK-based fintech company Revolut pulled its services in Hungary over the laws.
A section of Revolut’s Hungarian site said it had stopped all crypto-related services in the country — including withdrawals from the platform — due to “recently introduced Hungarian legislation,” and did not have a timeline for when it would reinstate the services.
However, Portfolio reported on Monday that Revolut had again allowed crypto withdrawals only. Revolut also said its EU arm is working on gaining a crypto license within the EU.
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