Prison for crypto? The Hungarian market is in complete chaos

While market players say they’ve received reassuring signals from the Hungarian National Bank (MNB) and the newly formed Supervisory Authority for Regulated Activities (SZTFH), no official statement has clarified whether or not the Criminal Code will be enforced in this sector. The legal ambiguity is so deep that no source consulted was willing to go on the record.

Diverging Reactions

Service providers have responded in three distinct ways. International giants like Binance, Coinbase and Kraken have continued operations as usual, citing valid EU licenses and a lack of detailed Hungarian regulations. Others, such as Hungarian platform CoinCash, have temporarily paused new user registrations but continue serving existing clients, referencing guidance from the European Securities and Markets Authority (ESMA). Revolut, however, has taken the most drastic step – a full suspension of crypto services. For Hungarian users with assets locked in the app, this has serious implications.

Revolut: On Hold – But Until When?

Initially, Revolut attributed the partial service suspension to upcoming EU regulations (MiCA – Markets in Crypto-Assets). However, by early July, the freeze extended to existing users as well. The company has not announced a timeline for resuming services in Hungary, citing simultaneous regulatory hurdles both at the EU and national level.

Behind the scenes, Revolut is reportedly seeking closer integration into Hungary’s financial ecosystem, including membership in the Hungarian Banking Association – a symbolic and strategic move. But the longer its crypto services remain suspended, the more it risks alienating local users.

Driving Innovation Away

The SZTFH stated that the changes are intended to enhance transparency and prevent money laundering and terrorist financing. Still, industry experts say the law is so vaguely worded that its practical implications are unpredictable. Hungarian crypto companies like CryptoSoft – which recently won a major European fintech award – could be driven abroad, joining others relocating to Hong Kong, Dubai, or Singapore in search of regulatory clarity.

Meanwhile, other players are capitalizing on Revolut’s pause. Bitget, a Singaporean-led crypto exchange registered in the Seychelles, has launched a Hungarian-language campaign offering AI trading tools and educational platforms to attract disoriented users.

The SZTFH clarified that it won’t supervise crypto assets themselves, only the exchange services – while the MNB and Ministry of Justice remain silent. Although the EU granted 18 months for MiCA implementation, Hungary’s additional criminal law overlay has introduced chaos where clarity was needed.

A Final Thought: A Misguided Message

The issue is not whether crypto should be regulated – it’s how. Penal threats are neither effective nor innovation-friendly. As the EU builds a harmonized regulatory framework, Hungary appears to be isolating itself with unclear, potentially harmful policies. In doing so, the country risks not only losing investor trust but also driving out its own fintech talent and startups.