Hungary Bans Crypto Trading For Most

Hungary Bans Crypto Trading For Most (Worthy News Investigation)

Stefan J. Bos

Hungary has become the first European Union nation to effectively ban cryptocurrency trading for most people, prompting Revolut, one of Europe’s largest online-only banks, to suspend its crypto services in the country.

An estimated 500,000 people in Hungary owning one or more crypto assets are impacted by hastily introduced legislation providing lengthy prison terms for violators.

Though holding crypto is not forbidden, selling or exchanging it can no longer be done legally. Since no licensed Hungarian exchanges exist, practically anyone trying to convert crypto into traditional currency would commit a criminal offense. 

Two new crimes were added to the Criminal Code as part of a larger legislative package, strictly regulating the exchange and distribution of cryptocurrencies. 

Critics say that the “T/11922/13 Bill,” passed last month, does not specify “what specific licenses are required” to trade crypto legally and how to obtain them. 

The law effectively criminalises an activity that cannot currently be legally carried out, including by those who bought crypto with their already taxed earnings. 

Instead, anyone operating a crypto exchange service without “a license” faces prison terms of up to eight years.

However, users of these services can also be prosecuted. Someone selling Bitcoin through an unlicensed platform could face between two and five years behind bars, “depending on the amount involved.”

Large transactions of over 50 million Hungarian forints (nearly $147,000) carry a potential three-year prison term, while amounts exceeding 500 million forints (almost $1.470 million) have a five-year imprisonment sentence. 

With the impact of the law becoming clear” We regret to inform you that we’ve temporarily paused Revolut Crypto services until further notice in Hungary, effective immediately,” Revolut wrote to its customers in an email.

NO BUYING

Revolut said it would not allow “any buy orders” and the “stake of new assets”, a reward system to help crypto run smoother, while “deposits will be rejected.” 

It claimed that users could still “sell crypto” or “withdraw crypto to an external wallet” when available. However, several Worthy News tests showed this not to be the case.

Revolut initially told Worthy News it may be a “technical glitch,” but it appeared that the company was following legal guidelines from Hungary’s government. A customer representative admitted to Worthy News that “we have done more than we communicated due to the Hungarian legislation.”

It was not immediately clear how the effective freezing of assets would impact Revolut’s customer base, which reached a $45 billion valuation last year, rivaling some of Europe’s largest lenders.