Hungary has introduced new laws concerning cryptocurrency trading that may negatively impact its domestic crypto market, as noted by the Blockchain Hungary Association. The updated criminal code imposes severe penalties for operating and using unlicensed exchanges, with potential prison sentences of up to eight years for operators and five years for large-scale traders. This initiative aims to strengthen legal compliance, enhance transparency, and support exchanges that adhere to EU regulations. However, vague implementation details have created uncertainty, leading to some firms like Revolut halting crypto services in Hungary. While the law targets illegal operations, its strictness could inadvertently push domestic players away, leading to a potential contraction in the market. Clarity in the implementation decree is crucial to ensure the retention of market participants. The regulations allow EU-licensed exchanges to operate in Hungary once the MiCA rules take effect by 2026, suggesting hope for a regulated future amidst the current turmoil.

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