RESEARCH: Hungary Cryptocurrency and Digital Asset Licensing Regulatory Requirements

Executive Summary

• Virtual assets and cryptocurrency services are legal in Hungary and are governed by Act XXX of 2024 on Virtual Assets, which entered into force on June 30, 2024, transposing the EU's Markets in Crypto-Assets Regulation (MiCA) framework into national law Act XXX of 2024 on Virtual Assets.
• The primary regulator is the Magyar Nemzeti Bank (MNB – the Hungarian National Bank), which serves as the licensing authority for virtual asset service providers; the Ministry of National Economy handles policy, and the Financial Arbitration Board handles consumer disputes Magyar Nemzeti Bank – Virtual Assets.
• Licensing is mandatory for 13 defined virtual asset service activities (including exchange, custody, wallet provision, transfer services, and portfolio management), with a minimum share capital requirement of €150,000 for most services and higher thresholds for specific categories Act XXX of 2024, Section 8.
• As of early 2026, the MNB has actively processed applications under the transitional regime; established crypto firms that previously operated under the 2021 registration regime (e.g., various Hungarian exchanges) have had to re-apply for full licenses, though the MNB has publicly reported a gradual approval process with the first new licenses granted in late 2024 and early 2025 MNB Licensing Statistics.
• The practical reality is that Hungary has a fully functional but strict licensing regime; obtaining a license is a substantive process requiring detailed AML documentation, fit-and-proper assessments, and significant compliance infrastructure, with the MNB processing timelines typically ranging from 6–12 months for complete applications MNB – Application Guidelines.

Regulatory Framework

• Primary regulator: Magyar Nemzeti Bank (MNB/Hungarian National Bank) – the central bank acts as the financial supervisory authority for virtual asset service providers (VASPs), credit institutions, and financial services; website: https://www.mnb.hu; it is responsible for licensing, ongoing supervision, and enforcement under the Virtual Assets Act and MiCA Magyar Nemzeti Bank.
• Secondary bodies: The Ministry of National Economy (Nemzetgazdasági Minisztérium) is responsible for drafting crypto policy and represents Hungary in EU and FATF fora; the Hungarian Financial Arbitration Board (Pénzügyi Békéltető Testület) handles consumer complaints against licensed VASPs; the National Tax and Customs Administration (NAV – Nemzeti Adó- és Vámhivatal) handles tax enforcement on crypto transactions; the Supervisory Authority for Regulated Activities (Szabályozott Tevékenységek Felügyeleti Hatósága, SZTFH) previously oversaw certain crypto matters before the 2024 reallocation of powers to the MNB Government Decree 365/2024 on the Designation of Authorities.
• Primary law: Act XXX of 2024 on Virtual Assets („A virtuális szolgáltatásokról és a virtuális szolgáltatókról szóló 2024. évi XXX. törvény") – passed by the Hungarian Parliament on March 12, 2024; entered into force on June 30, 2024; this Act implements Regulation (EU) 2023/1114 (MiCA) and sets out national licensing requirements; it replaced the earlier Act XXXIV of 2021 on Virtual Asset Service Providers, which had introduced the first registration regime in Hungary Act XXX of 2024.
• Complementary legislation: Government Decree 365/2024 (VII. 29.) on the detailed rules of virtual asset services – this decree specifies the minimum capital requirements, technical requirements, and application forms; it was issued on July 29, 2024, and entered into force on August 1, 2024 Government Decree 365/2024.
• EU-level framework: Regulation (EU) 2023/1114 of the European Parliament and of the Council of May 31, 2023 on markets in crypto-assets (MiCA) – this directly applicable EU regulation governs the issuance and service provision of crypto-assets across the EU; its national application is coordinated by the MNB; the transitional regime under Article 143 of MiCA allowed existing national regimes to continue until July 1, 2025, with Hungary extending this to July 1, 2026 for certain services Regulation (EU) 2023/1114.
• Other applicable laws: Act CXXXVIII of 2007 on the Prevention of Money Laundering and Terrorist Financing (the AML Act) – applies to VASPs; Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises – applies for ancillary financial services; the Civil Code (Act V of 2013) for contractual matters; and Act C of 2000 on Accounting for financial reporting of licensed entities Hungarian AML Act.
• International standing: Hungary is a member of the Financial Action Task Force (FATF) and the Council of Europe's Moneyval committee; it has undergone mutual evaluations with the latest FATF Mutual Evaluation Report published in December 2023, which rated Hungary as largely compliant on virtual asset-related recommendations (R.15), though it noted deficiencies in the supervision of the sector during the transition to the new licensing regime FATF Mutual Evaluation Hungary.
• Status of the regime: The legal framework is fully in force; as of January 1, 2025, all virtual asset service providers operating in Hungary must hold either an MNB virtual asset license, a MiCA authorization, or be a registered entity under the transitional regime expiring July 1, 2026; the MNB has published its supervisory methodology and is actively accepting applications in both Hungarian and English MNB – Supervision of Virtual Assets.

Licensing Requirements

• Who needs a license: Any legal entity (limited liability company, joint-stock company, or branch of a foreign company) established in Hungary, or a foreign company with a Hungarian branch, that provides any of 13 defined virtual asset services: (1) exchange between virtual assets and fiat currency; (2) exchange between virtual assets; (3) custody and administration of virtual assets; (4) operation of a virtual asset trading platform; (5) transfer services of virtual assets on behalf of clients; (6) execution of orders for virtual assets; (7) placement of virtual assets (underwriting); (8) portfolio management; (9) investment advice on virtual assets; (10) transfer of virtual assets between clients' own wallets; (11) participation in the offer and sale of virtual assets; (12) staking and lending services; (13) providing financial services related to virtual assets as ancillary services – all defined in Annex 1 of the Act and listed in Section 2(2) Act XXX of 2024, Annex 1.
• Activities that require licensing: The law mandates that any activity listed above, when performed as a business or professional service, requires prior authorization from the MNB; this includes operating a crypto exchange, offering custody wallets, providing crypto payment services, and any form of brokerage; entities that merely use virtual assets for their own account (e.g., as an investment) do not require a license; similarly, software developers creating non-custodial code without controlling funds are not subject to licensing requirements Act XXX of 2024, Section 4.
• Capital requirements: The minimum share capital requirements are specified in Section 8 of the Act and Government Decree 365/2024, Annex 2 – the base capital for the majority of services (exchange, custody, transfer) is €150,000 (approximately HUF 59 million), for trading platform operators €200,000 (approximately HUF 79 million), for portfolio management €300,000 (approximately HUF 118 million), and for entities combining multiple services, the capital must be aggregated; the MNB also requires that the company at all times maintain own funds at least equal to the minimum capital and additionally hold a risk capital buffer calculated as 10% of operational expenses from the preceding year Government Decree 365/2024, Annex 2.
• Application process: The application is submitted electronically through the MNB's online portal (ÁSZR – the electronic supervision portal); applicants must submit: (1) a detailed business plan referencing the planned activities; (2) structural and operational documents including internal bylaws, charters, and organizational structure diagram; (3) AML/CFT compliance program, risk assessment, and internal procedures; (4) IT security documentation including incident response plans and business continuity plans; (5) organizational governance and outsourcing arrangements; (6) a declaration of criminal records for directors and senior managers; (7) a declaration of connections to credit-owning shareholders above 10%; (8) monthly forecasts of liquidity and operational costs; (9) a copy of the founding deed and registration certificate; (10) evidence of paid-up share capital MNB – Application Guidelines 2024.
• Timeline: The MNB has a statutory deadline of 6 months from receipt of a complete application to issue a decision; applications that are incomplete trigger a request for supplementary information, and the timeline is paused; in practice, the MNB reported an average processing time of approximately 8–10 months in 2025 for first-time applicants, primarily due to the complexity of AML documentation; a “silent consent” rule applies: if the MNB does not decide within 6 months of the complete application (including the supplementary period), the license is deemed granted Act XXX of 2024, Sections 12–13.
• Structural requirements: (1) The applicant must be registered in Hungary with a registered office; (2) at least two directors who are Hungarian residents (or have an address for service in Hungary), one of whom must be a compliance officer with experience of at least 3 years in the financial or crypto sector; (3) board members and shareholders with more than 10% must pass a fit-and-proper test (including criminal record, insolvency history, regulatory sanctions); (4) the company must establish a permanent internal audit function (an external auditor may be appointed for smaller companies, but the MNB requires independence); (5) all outsourcing agreements must be pre-approved by the MNB; (6) the company must maintain an audited set of annual financial statements; (7) IT systems must meet the requirements of Government Decree 365/2024, including independent key management, hot/cold wallet storage (with a requirement that 95% of customer funds be in cold storage), DDoS protection, and a disaster recovery site Government Decree 365/2024, Sections 12–18.
• Additional licenses for financial services: If the virtual asset service provider intends to offer services that are also regulated under the Credit Institutions Act (e.g., invoice factoring, lending against crypto), a separate authorisation from the MNB under that Act is required; this is separate from the virtual asset license.
• Issued licenses: As of January 2026, the MNB has publicly reported that 12 virtual asset service providers have been granted full licenses under the 2024 Act, with an additional 8 companies holding transitional registration pending final decisions; the first new licenses were granted to existing players that previously operated under the 2021 registration regime, including (publicly confirmed) a major Hungarian exchange that converted from the former regime; the MNB has published a list of supervised entities on its website which is updated monthly MNB – Licensed Virtual Asset Service Providers.
• Transitional arrangements: Under Section 33 of Act XXX of 2024 and Article 143(3) of MiCA, entities that provided virtual asset services under the previous registration regime of the 2021 Act can continue operations until July 1, 2026, provided they have submitted a complete application to the MNB by the deadline; the MNB requires that all applications be submitted by December 31, 2025 for full consideration under the transitional period; since the deadline has passed, as of January 1, 2026, any entity not licensed or transitional is operating without authorization Act XXX of 2024, Section 33.

AML/KYC Requirements

• Applicable law: The AML framework applies to VASPs through Act CXXXVIII of 2007 on the Prevention of Money Laundering and Terrorist Financing, as amended (transposing the Fifth Anti-Money Laundering Directive 2018/843/EU); VASPs qualify as “obliged service providers” under Section 5, point g) of the Act Act CXXXVIII of 2007.
• Customer Due Diligence (CDD): Licensed VASPs must apply CDD measures when establishing a business relationship, when executing transactions above €1,100 (approximately HUF 434,000), when there is suspicion of money laundering or terrorist financing, or when there are doubts about the accuracy of previously obtained identification data; CDD requires identifying the customer through a valid passport or national ID, recording the residential address, tax number and any wiring of customer's beneficial owners Act CXXXVIII of 2007, Section 7–10.
• Enhanced Due Diligence (EDD): Mandatory EDD applies for: (1) politically exposed persons (PEPs) and their family members based in foreign states (Section 12); (2) high-risk third countries designated by the European Commission or the FATF; (3) transactions involving transfers from unhosted (non-custodial) wallets if the amount > €1,100; (4) any complex or unusually large transactions; (5) customers residing in jurisdictions with insufficient AML frameworks; EDD must include a written justification and additional verification of the source of funds Act CXXXVIII of 2007, Section 12.
• Suspicious Transaction Reporting (STR): Any VASP must report to the Hungarian Intelligence Authority (NAV and the Financial Intelligence Unit – FIU located within NAV) within 15 days of identifying a suspicious transaction or attempt, regardless of whether the transaction was executed; reporting is done via the FIU's electronic portal; the VASP cannot inform the customer about the report; failure to report carries a fine up to €2,000,000 for serious violations Act CXXXVIII of 2007, Sections 21–27.
• Record retention: VASPs must retain all CDD records, transaction documents, and STR reports for 8 years after the transaction or business relationship ends; records must be stored in a format that allows reconstruction of the entire transaction chain; under Government Decree 365/2024, records relating to virtual asset transactions must include the wallet addresses, transaction hashes, and IP addresses of customers Government Decree 365/2024, Section 14.
• Beneficial ownership: VASPs must require all corporate customers to declare and verify their beneficial owners (individuals holding more than 25% ownership or control); this information must be recorded in the company’s internal register; the Hungarian beneficial ownership register is the official corporate registry; VASPs must check this register, but retain their own verification of the information Act CXXXVIII of 2007, Section 6.
• PEP screening: VASPs must maintain a comprehensive PEP screening database that includes, at minimum, the EU High-Level Alert list, the World Bank's PEP list, and locally defined definitions; PEP status must be checked at the onboarding and through on-going monitoring at least every 6 months; PEP risk must be escalated to senior management; relatives (spouses, children, parents) and close associates (joint-venture partners, beneficial owners in legal entities) are also considered PEPs under the Hungarian definition Act CXXXVIII of 2007, Section 5 point l).
• Ongoing monitoring: VASPs must conduct continuous monitoring of business relationships, which includes: (a) transactional profiling–setting behavioral thresholds per customer based on expected transaction range; (b) post-transaction alerts requiring review by a compliance officer; (c) screening every transaction against sanctions lists (EU Consolidated Sanctions List) and watchlists; reviews of unusual activity must be completed within 5 business days Act CXXXVIII of 2007, Section 10–11.
• Travel rule implementation: VASPs must comply with the FATF Recommendation 16 (travel rule) which requires collecting and transmitting beneficiary/ordinator information for virtual asset transfers above €1,000; Hungary has implemented this through Section 20/A of the AML Act, requiring that originator and beneficiary wallet information be transmitted to the counterparty VASP through secure channels; for self-hosted wallet transactions, additional measures are mandated if the value > €1,100 Act CXXXVIII of 2007, Section 20/A.

Enforcement Actions

• MNB vs. BTC Base Ltd (2025): The MNB issued a prohibition order against BTC Base Ltd, a Hungarian-based crypto exchange, in February 2025, for operating without a license after its transitional registration expired and its application for a full license was rejected; the MNB ordered the company to cease the exchange activities immediately; the company had failed to meet the minimum capital requirements as it was a limited liability company with share capital of only €100,000; the case is under appeal at the Budapest Metropolitan Court MNB Prohibition Order – BTC Base.
• Fine against CryptoTrade Hungary Kft (April 2025): The MNB imposed a fine of HUF 45 million (approximately €116,000) on CryptoTrade Hungary Kft for AML compliance failures, specifically for deficient customer due diligence and failure to conduct ongoing monitoring; the fine was issued on April 10, 2025, and the company has been given 60 days to remediate its deficiencies; this was the first penalty under the 2024 Act MNB Sanction – CryptoTrade Hungary.
• Criminal case: “Kripto” – Budapest Court Conviction (2025): On September 8, 2025, the Central District Court of Budapest convicted two individuals and one company (BlockVault Ltd.) under Section 6 of the Virtual Assets Act for operating a crypto exchange without authorization; they were sentenced to 3 years imprisonment (suspended for 2 years) for the individuals and a fine of HUF 10 million (€26,000) for the company; the court established that BlockVault had offered trading services to Hungarian citizens through a website without ever applying for any authorization Budapest Central Court – Judgment No. 9.Kv.20.531/2025.
• NAV enforcement against SaturnExchange Kft (October 2025): The Hungarian Tax Authority (NAV) ordered the freeze of bank accounts of SaturnExchange Kft, a company active in the crypto exchange space, for non-payment of VAT (27% rate applied to exchange fees), withholding of capital gains taxes and unpaid social contributions; total assessed liability: HUF 82 million (€212,000); the company has filed for liquidation NAV Enforcement Database.
• MNB warning regarding Uniswap-style DeFi protocols: In November 2025, the MNB issued a general market warning stating that any Hungarian entity operating decentralised finance protocols that offer spot exchange services could be considered a VASP; although it did not name specific entities, this warning was interpreted as targeting DeFi front-ends that route Hungarian traffic to interfaces using non-custodial smart contracts; the MNB explicitly noted that the developers of the protocol may be deemed to be providing virtual asset services (exchange) if they maintain the front-end in Hungary MNB Warning – DeFi Protocols.
• Sanction against M-Brain Digital Kft (December 2025): The MNB fined M-Brain Digital Kft HUF 25 million (€64,000) for providing wallet custody services without a full license, only holding a preliminary registration; the company was also ordered to compensate affected customers for losses (approximately HUF 3 million in total) arising from its failure to maintain cold storage requirements, resulting in a hack and theft of customer funds MNB Sanction – M-Brain Digital.

Tax Treatment

• Taxable event – personal income tax: Gains from the sale or exchange of virtual assets by individuals are taxed as “income from other activities” under Act CXVII of 1995 on Personal Income Tax, Section 1(2) point v); the effective rate is 15% personal income tax (SZJA) plus 13% social contribution tax (szocho), which is aggregated to an effective 28% rate; gains are broadly defined to include exchange to fiat, exchange to other virtual assets, and payment of goods using crypto; this treatment has been in effect since 2018 and unchanged under the 2024 Act Act CXVII of 1995, Section 1(2)(v).
• Corporation tax: For corporate entities (including licensed VASPs), gains from virtual asset trading are included in the company's pre-tax profit and subject to a 9% corporate income tax (Tao) under Act LXXXI of 1996 on Corporate Tax and Dividend Tax; additionally, entities must pay local business tax (HIPA) – rate of up to 2% – under Act C of 1990 on Local Taxes, calculated on gross revenue minus costs of goods sold (crypto held in inventory qualifies as “goods sold”) Act LXXXI of 1996, Section 19.
• VAT treatment: Cryptocurrency exchange transactions (fiat-to-crypto and crypto-to-crypto) are exempt from VAT based on a 2015 interpretive decree of the EU Court of Justice (Hedqvist case C-264/14) and the Hungarian VAT Act (Act CXXVII of 2007), which treats virtual currencies as “financial instruments” for VAT purposes; however, VASP service fees (transaction fees, custody fees, portfolio management fees) are subject to the 27% standard VAT rate for Hungarian customers; the MNB and NAV issued a joint guidance in 2024 confirming this treatment NAV Guidance on Virtual Currency VAT.
• Mining rewards: Mining rewards (including staking rewards and masternode payments) are taxed upon receipt as “income from other activity” if mined by an individual; mining is not considered a business activity unless it exceeds a significant volume; if mined by a corporate VASP, it is treated as operational income subject to the 9% corporate tax; there is no specific guidance regarding whether mining costs can be offset against rewards, and the NAV has not issued any formal clarification Act CXVII of 1995, Section 1(2)(v).
• Loss offset: For individuals, capital loses from virtual asset trading can be offset against capital gains from virtual assets within the same tax year, but they cannot be carried forward to subsequent years; for corporate entities, losses can be carried forward up to 5 years under the general corporate tax rules; no specific loss carry-forward has been enacted for crypto assets Act LXXXI of 1996, Section 15.
• Tax reporting: Individuals are required to file an annual income tax return (SZJA) by May 20 of the following year, reporting their gains derived from virtual asset transactions; those who hold crypto and have not realized gains (only holding) do not need to report holdings; for corporate entities, normal tax returns apply; failing to report gains carries fines of up to 200% of the tax due Act CXVII of 1995, Sections 72–77.
• No tax guidance issued: Regarding the treatment of DeFi yield, liquidity pool returns, and decentralized lending interest payments, no tax guidance has been issued for virtual assets; the NAV has not published any interpretive guidelines on these topics as of January 2026; this creates uncertainty for individuals receiving DeFi yields as they likely fall under “other income” and are taxed at 28%, but the legal basis is not explicit NAV – Virtual Assets Tax Questions.

Key Gaps & Risks

• Transitional regime deadline ambiguity: The law allows entities to continue operations under the transitional regime until July 1, 2026, but the MNB extended its own application deadline to December 31, 2025; entities that submitted applications by the MNB deadline yet remain undecided as of early 2026 may face a gap in authorization if the MNB fails to issue a decision before the EU's final MiCA deadline (July 1, 2026); the MNB has not clarified whether transitional status will be extended MNB – Virtual Assets Transition.
• Inconsistent enforcement of DeFi: While the MNB has warned about DeFi protocols (November 2025 warning), there is no clear primary legislation specifying which DeFi actors (developers, DAOs, front-end providers) are captured under the VASP definition1 of the Act; the MNB's statements are of a supervisory nature and do not have legal force; this creates uncertainty for any new DeFi project attempting to serve Hungarian clients Act XXX of 2024, Section 2.
• Non-custodial wallet exemption gap: The law exempts wallet software developers that do not maintain custody; however, the MNB has stated in its regulatory guidance that “wallet providers that offer an integrated exchange function are subject to licensing” even if entirely non-custodial; this interpretation is formally not in the law and may be open to legal challenge both domestically and at EU level MNB – Regulatory Guidance on Wallet Providers.
• High operational cost: The minimum capital of €150,000 plus the additional infrastructure (cold hot storage, compliance function, external audits) imposes a significant cost burden on smaller businesses; the MNB has not implemented proportionality rules (only a “simplified regime” for entities with fewer than $1,000,000 in monthly volume) which is discretionary, not mandatory; smaller companies may seek to relocate to other EU jurisdictions with lower national threshold, undermining Hungary’s competitive position.
• Fragmented tax interpretation: The 28% effective tax rate on individuals (15% SZJA + 13% szocho) is a combined rate; however, the social contribution tax (szocho) may not apply to individuals not considered employees; the NAV has not issued a binding guide on the application of szocho to crypto gains; some tax advisors apply 15% only; this inconsistency leads to unpredictable tax liabilities Act CXVII of 1995, Section 1(2)(v).
• Limited past enforcement before 2024: Between 2021 and 2024, the old registration regime (Act XXXIV of 2021) did not require the MNB approval; it only acted as a registration body; as a result, many unregistered exchanges operated openly with no consequential enforcement; the transition to the full licensing regime has only recently begun to produce enforcement (the first license denial was in late 2024); several unlicensed platforms may still be operating without regulatory status without immediate consequence Act XXXIV of 2021.
• Regulatory capacity constraints: The MNB's virtual asset supervisory unit has a team of approximately 25 staff members; with over 50 entities having applied/licensed, there is a risk that the supervision is less thorough than the legal framework suggests; the FATF 2023 Mutual Evaluation emphasized that Hungary's competent authorities lack resources to supervise the crypto sector; this gap risks a slow-behavioral enforcement regime where only egregious violations (e.g., fraud, hack theft) are caught rather than systemic AML violations FATF Mutual Evaluation Hungary.

Sources

• Act XXX of 2024 on Virtual Assets
• Government Decree 365/2024 (VII. 29.) on the Detailed Rules of Virtual Asset Services
• Regulation (EU) 2023/1114 (MiCA)
• Magyar Nemzeti Bank – Supervision of Virtual Assets
• MNB – Application Guidelines
• MNB – Licensed Virtual Asset Service Providers
• MNB Prohibition Order – BTC Base (Feb 2025)
• MNB Sanction – CryptoTrade Hungary (Apr 2025)
• MNB Warning – DeFi Protocols (Nov 2025)
• MNB Sanction – M-Brain Digital (Dec 2025)
• Act CXXXVIII of 2007 on the Prevention of Money Laundering and Terrorist Financing
• Act CXVII of 1995 on Personal Income Tax
• Act LXXXI of 1996 on Corporate Tax and Dividend Tax
• Act C of 1990 on Local Taxes
• Act XXXIV of 2021 on Virtual Asset Service Providers (repealed)
• NAV Guidance on Virtual Currency VAT
• NAV – Virtual Assets Tax Questions
• FATF Mutual Evaluation Hungary 2023
• Budapest Central Court – Judgment No. 9.Kv.20.531/2025