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Hungary

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#348
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Created
2025-06-26 12:46
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Executive Summary

Retail cryptocurrency trading is legally permitted in Hungary and is increasingly regulated, primarily due to the EU's MiCA regulation. Hungary has transposed MiCA into its national law through Act VII of 2024, designating the Central Bank of Hungary (MNB) as the primary supervisory authority for crypto-asset service providers (CASPs). CASPs are required to obtain licensing and adhere to stringent AML/KYC requirements. Profits from cryptocurrency transactions are subject to a 15% personal income tax for individuals and a 9% corporate tax for businesses.

Key Pillars

The primary regulator is the Central Bank of Hungary (Magyar Nemzeti Bank - MNB). The regulatory framework includes licensing requirements for CASPs (exchanges, wallet providers, custodians), stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, and enforcement of the 'Travel Rule'. The framework is primarily driven by the European Union's Markets in Crypto-Assets Regulation (MiCA), transposed into Hungarian law as Act VII of 2024.

Landmark Laws

Act VII of 2024 on the market in crypto-assets ('Crypto Act'): Effective June 30, 2024, this act transposed MiCA into Hungarian law, designating the MNB as the supervisory authority for CASPs. Markets in Crypto-Assets Regulation (MiCA) (EU 2023/1114): Entered into force on December 30, 2024, introducing a harmonized framework for the operation of CASPs across the European Union. Act LIII of 2017 on the prevention and combatting of money laundering and terrorist financing (Hungarian AML Act): Requires CASPs to conduct full customer due diligence.

Considerations

Cryptocurrencies are treated as assets rather than currencies for taxation purposes. Individual profits from cryptocurrency transactions are subject to a 15% personal income tax. Businesses face a 9% corporate tax on crypto activities alongside the 15% personal income tax on capital gains. CASPs must verify customer identities for transactions, often above a certain threshold (e.g., €1,000 or HUF 4.5 million for establishing a business relationship, and HUF 300,000 for occasional transactions). The MNB has issued warnings regarding the risks associated with cryptocurrencies, but the regulatory direction aims to enhance consumer protection, financial stability, and market transparency.

Notes

Hungary has opted for a transitional 'grandfathering' period for CASPs already operating before December 30, 2024, allowing them to continue operations based on pre-MiCA licenses until July 1, 2025. After this date, all CASPs must obtain a MiCA license from the MNB to operate legally. CASPs are required to monitor transactions for suspicious activities and report them to the MNB and the financial intelligence unit of the National Tax and Customs Administration (NAV). The new law includes provisions for consumer complaint handling and requires crypto-asset service providers to appoint a contact person for consumer protection matters.

Detailed Explanation

Retail cryptocurrency trading is legally permitted in Hungary and is increasingly subject to a specific regulatory framework driven by the European Union's Markets in Crypto-Assets Regulation (MiCA). Hungary has transposed MiCA into its national legal system through Act VII of 2024 on the market in crypto-assets ('Crypto Act'), which came into effect on June 30, 2024. This legislation designates the Central Bank of Hungary (Magyar Nemzeti Bank - MNB) as the primary supervisory authority responsible for overseeing crypto-asset service providers (CASPs) and ensuring their compliance with both Hungarian and EU regulations.

Historically, Hungary lacked specific crypto laws, with activities falling under general financial regulations and a 2022 amendment to the Personal Income Tax Act classifying cryptocurrency income as a separate taxable income at a 15% rate. The new Crypto Act and the implementation of MiCA mark a significant shift towards a formalized regulatory environment.

The regulatory framework mandates licensing for CASPs, including exchanges, wallet providers, and custodians, under the MNB. These providers are subject to stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, as stipulated in Act LIII of 2017. For instance, CASPs must verify customer identities for transactions, often above a certain threshold (e.g., €1,000 or HUF 4.5 million for establishing a business relationship, and HUF 300,000 for occasional transactions or transfers of funds). They are also required to monitor transactions for suspicious activities and report them to the MNB and the financial intelligence unit of the National Tax and Customs Administration (NAV). The 'Travel Rule' is enforced, requiring CASPs to collect and share identifying information for senders and recipients of cryptocurrency transactions.

Hungary has opted for a transitional 'grandfathering' period for CASPs already operating before December 30, 2024. These entities can continue operations based on pre-MiCA licenses but must fully comply with MiCA requirements by July 1, 2025. After this date, all CASPs providing services in Hungary must obtain a MiCA license from the MNB to operate legally. Failure to comply can lead to sanctions, including suspension of activities.

The MNB has issued warnings in the past regarding the risks associated with cryptocurrencies. However, the current regulatory direction, aligned with MiCA, aims to enhance consumer protection, financial stability, and market transparency while fostering innovation. The new law includes provisions for consumer complaint handling and requires crypto-asset service providers to appoint a contact person for consumer protection matters.

In terms of taxation, profits from cryptocurrency transactions for individuals are generally subject to a 15% personal income tax. Businesses face a 9% corporate tax on crypto activities, which is notably low in Europe, alongside the 15% personal income tax on capital gains.

Overall, individual citizens and residents are permitted to engage in cryptocurrency trading, and the environment is now firmly 'Allowed-Regulated,' with a comprehensive framework being actively implemented to govern the activities of service providers and protect investors.

Summary Points

Retail Cryptocurrency Trading in Hungary: Regulatory Overview (June 2025)

Current Status: Allowed-Regulated

1. Key Regulatory Bodies & Roles:

  • Magyar Nemzeti Bank (MNB) / Central Bank of Hungary (CBH):
    • Primary supervisory authority for crypto-asset service providers (CASPs).
    • Responsible for licensing and overseeing CASPs.
    • Ensures compliance with Hungarian and EU regulations (specifically MiCA).
    • Receives reports of suspicious activities from CASPs.
    • Issues warnings regarding cryptocurrency risks.
    • Handles consumer complaints related to CASPs.
  • National Tax and Customs Administration (NAV):
    • Financial intelligence unit.
    • Receives reports of suspicious activities from CASPs.

2. Important Legislation & Regulations:

  • Act VII of 2024 on the market in crypto-assets ("Crypto Act"):
    • Transposes the EU's Markets in Crypto-Assets Regulation (MiCA) into Hungarian national law.
    • Came into effect on June 30, 2024.
    • Designates the MNB as the competent authority.
  • Markets in Crypto-Assets Regulation (MiCA) (EU 2023/1114):
    • EU-wide regulation introducing a harmonized framework for CASPs.
    • Entered into force on December 30, 2024.
  • Act LIII of 2017 on the prevention and combatting of money laundering and terrorist financing (Hungarian AML Act):
    • CASPs fall under the scope of this act.
  • Personal Income Tax Act (amended 2022):
    • Classifies cryptocurrency income as a separate taxable income.

3. Requirements for Compliance (for CASPs):

  • Licensing:
    • Mandatory licensing from the MNB to operate legally in Hungary.
    • Applies to exchanges, wallet providers, and custodians.
    • MiCA license required after July 1, 2025.
  • Anti-Money Laundering (AML) & Know Your Customer (KYC):
    • Stringent AML/KYC requirements.
    • Customer identity verification for transactions.
      • Thresholds:
        • HUF 4.5 million (approx. EUR 11,660) for establishing a business relationship.
        • HUF 300,000 for occasional transactions or transfers of funds.
    • Transaction monitoring for suspicious activities.
    • Reporting suspicious activities to the MNB and NAV.
  • Travel Rule:
    • Enforced; CASPs must collect and share identifying information for senders and recipients of cryptocurrency transactions.
  • Consumer Protection:
    • Consumer complaint handling procedures.
    • Appointment of a contact person for consumer protection matters.

4. Notable Restrictions or Limitations:

  • Licensing Requirement: CASPs must obtain a MiCA license from the MNB to operate legally after the transitional period.
  • AML/KYC Compliance: Strict adherence to AML/KYC regulations is mandatory.
  • Potential Sanctions: Failure to comply with regulations can lead to sanctions, including suspension of activities.

5. Recent Developments & Changes:

  • Implementation of MiCA: Hungary has transposed MiCA into national law through Act VII of 2024.
  • "Grandfathering" Period:
    • CASPs operating before December 30, 2024, can continue operations based on pre-MiCA licenses.
    • Must fully comply with MiCA requirements by July 1, 2025.
  • MNB as Supervisory Authority: The Central Bank of Hungary (MNB) is now the primary supervisory authority for CASPs.

6. Taxation:

  • Individuals: 15% personal income tax on capital gains from cryptocurrency transactions.
  • Businesses: 9% corporate tax on crypto activities, 15% personal income tax on capital gains.

Full Analysis Report

Retail_Trading_Status in Hungary

Report Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assessment of whether individual citizens and residents in Hungary are legally permitted to buy, sell, and hold cryptocurrencies. Detailing the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status

Allowed-Regulated

2. Detailed Narrative Explanation

Retail cryptocurrency trading is legally permitted in Hungary and is increasingly subject to a specific regulatory framework, primarily driven by the European Union's Markets in Crypto-Assets Regulation (MiCA). Hungary has transposed MiCA into its national legal system through Act VII of 2024 on the market in crypto-assets ("Crypto Act"), which came into effect on June 30, 2024. This new legislation designates the Central Bank of Hungary (Magyar Nemzeti Bank - MNB) as the primary supervisory authority responsible for overseeing crypto-asset service providers (CASPs) and ensuring their compliance with both Hungarian and EU regulations.

Historically, Hungary lacked specific, comprehensive crypto laws, with activities falling under general financial regulations and a notable 2022 amendment to the Personal Income Tax Act that classified cryptocurrency income as a separate taxable income at a 15% rate. The new Crypto Act and the implementation of MiCA mark a significant shift towards a formalized regulatory environment.

The regulatory framework mandates licensing for CASPs, including exchanges, wallet providers, and custodians, under the MNB. These providers are subject to stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. For instance, CASPs must verify customer identities for transactions, often above a certain threshold (e.g., €1,000 or HUF 4.5 million for establishing a business relationship, and HUF 300,000 for occasional transactions or transfers of funds). They are also required to monitor transactions for suspicious activities and report them to the MNB and the financial intelligence unit of the National Tax and Customs Administration (NAV). The "Travel Rule" is enforced, requiring CASPs to collect and share identifying information for senders and recipients of cryptocurrency transactions.

Hungary has opted for a transitional "grandfathering" period for CASPs already operating before December 30, 2024. These entities can continue operations based on pre-MiCA licenses but must fully comply with MiCA requirements by July 1, 2025. After this date, all CASPs providing services in Hungary must obtain a MiCA license from the MNB to operate legally. Failure to comply can lead to sanctions, including suspension of activities.

The MNB has issued warnings in the past regarding the risks associated with cryptocurrencies. However, the current regulatory direction, aligned with MiCA, aims to enhance consumer protection, financial stability, and market transparency while fostering innovation. The new law includes provisions for consumer complaint handling and requires crypto-asset service providers to appoint a contact person for consumer protection matters.

In terms of taxation, profits from cryptocurrency transactions for individuals are generally subject to a 15% personal income tax. Businesses face a 9% corporate tax on crypto activities, which is notably low in Europe, alongside the 15% personal income tax on capital gains.

Overall, while individual citizens and residents are permitted to engage in cryptocurrency trading, the environment is now firmly "Allowed-Regulated," with a comprehensive framework being actively implemented to govern the activities of service providers and protect investors.

3. Specific, Relevant Text Excerpts

  • CMS Expert Guide to Crypto Regulation in Hungary (updated in the context of Act VII of 2024 and MiCAR): "The Hungarian legislature has passed Act VII of 2024 on the market in crypto-assets, designating the Central Bank of Hungary (CBH) as the competent authority responsible for ensuring the compliance of crypto-asset service providers with MiCAR."
  • CMS Expert Guide to Crypto Regulation in Hungary (on AML/KYC): "Providers of exchange services between virtual currencies and fiat currencies, between different types of virtual currencies, and custodian wallet providers, fall under the scope of the Hungarian AML Act (Act LIII of 2017 on the prevention and combatting of money laundering and terrorist financing). Among other things, they need to conduct a full customer due diligence: when establishing a business relationship; when carrying out an occasional transaction that amounts to HUF 4.5 million (approx. EUR 11,660) or more..."
  • Taylor Wessing on MiCA Implementation (April 29, 2025): "Hungary's implementation of the EU's Markets in Crypto-Assets Regulation (MiCA) is set to reshape the country's crypto landscape... The MiCA Regulation (EU 2023/1114), which entered into force on 30 December 2024, introduces a harmonized framework for the operation of CASPs across the European Union. Hungary has opted to apply a transitional or “grandfathering” period, during which CASPs may continue operating based on their pre-MiCA licenses... The grandfathering period in Hungary runs until 1 July 2025. After that date, all CASPs providing services in Hungary will need to obtain a MiCA license to continue operations."
  • Coinfomania on Hungarian Crypto Regulation (June 19, 2025): "In 2025, the cryptocurrency sector development in Hungary would undergo vigorous changes because of how Act VII of the year 2023 transforms the EU's MiCA rules into national law... Act VII of 2023 Mandates licensing for exchanges, wallets, and custodians under the Hungarian National Bank (MNB). AML/KYC Rules: CASPs must verify identities for transactions over €1,000."
  • Wolf Theiss on MiCA Deadline (April 7, 2025): "In Hungary, Act VII of 2024 on the crypto asset market was adopted to implement these regulations and came into effect on 30 June 2024. The practical application of the new regulation is happening gradually, with the next key deadline for market players to mark on their calendars being 1 July 2025. By the end of this transition period in Hungary, crypto asset service providers that were already operating prior to 30 December 2024 must fully comply with MiCA requirements."
  • Scorechain on Travel Rule in Hungary (undated, accessed June 2025): "Cryptocurrency is fully legal in Hungary, and residents can buy, sell, and hold virtual assets. The country's regulatory framework ensures secure and transparent operations within the crypto industry... All Crypto Asset Service Providers (CASPs) operating in Hungary must register with the Central Bank of Hungary (MNB)... Hungary enforces the Travel Rule, requiring CASPs to collect and share identifying information for the senders and recipients of cryptocurrency transactions."
  • BékésPartners on the Hungarian Crypto Act (undated, referencing Act VII of 2024): "These areas were regulated by the European Union in the so-called MiCa Regulation, which Hungary implemented with the Crypto Act. The new adopts the uniform terminology used by the European Union and designates the central bank, Magyar Nemzeti Bank (“MNB”) as the supervisory body."
  • UEEx Technology on Crypto Exchanges in Hungary (April 25, 2025): "Cryptocurrency trading is legal in Hungary, with exchanges required to comply with both EU and local regulations to ensure user protection and financial stability... In April 2024, Hungary adopted Act VII, aligning with the EU's Markets in Crypto-Assets Regulation (MiCA) to enhance consumer protection and financial stability. The National Bank of Hungary (MNB) oversees compliance, and exchanges must adhere to these standards to operate legally within the country."
  • Crystal Worldwide on Crypto Taxes in Hungary (April 21, 2025): "In Hungary, cryptocurrencies are treated as assets rather than currencies, so their profits are taxable... As an individual, you only have to pay 15% of personal income tax (személyi jövedelem adó, SZJA) on your capital gains."

4. Direct, Accessible URL Links to Sources

Web Sources (14)

Sources discovered via web search grounding

Search queries used (6)
  • Retail cryptocurrency trading regulations Hungary 2025
  • Hungarian National Bank cryptocurrency stance 2025
  • Hungary crypto KYC/AML requirements 2025
  • Legal status of buying and selling cryptocurrency in Hungary for individuals 2025
  • Recent cryptocurrency law changes Hungary
  • Official statements Hungary cryptocurrency retail investors 2025
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