How to obtain a cryptocurrency license in Hungary

Regulation of the cryptocurrency market is constantly becoming stricter. Nowadays jurisdictions impose high regulatory and risk management requirements on virtual asset service providers.

Despite this, we always manage to find a solution that suits the client. All the time our team provides research of the market and regulations on various markets to find the best jurisdiction. Recently we have made the global overview of the VASP regulation in EEA and ready to share information with our future and existing clients. Today we will look at the features of obtaining a cryptocurrency license in Hungary.

Tax Summary:

  1. Personal income tax –  15%
  2. Corporate income tax – 9%

What law/s governs VASP activities?

  1. Act LIII of 2017 on Preventing and Combating Money Laundering and Terrorist Financing (“AML Act“)

What activities are included in VASP services?

The following services fall under the scope of the Hungarian AML Act (Section 1):

  1. Providers of exchange services between virtual currencies and fiat currencies, and between different types of virtual currencies.
  2. Custodian wallet providers.

Who is the VASP regulator?

  1. Pénzmosás és Terrorizmusfinanszírozás Elleni Iroda (“PTEI”)
  2. Nemzeti Adó- és Vámhivatal (“NAV“)

What is the procedure for registering a VASP for a local company?

There is no licensing or authorization for VASPs in Hungary. VASPs must fulfill only the minimum requirements related to AML regulation if such VASP is established in Hungary or serves customers in Hungary. 

In order to fulfill its AML obligations, a VASP must (paragraph 9, Section 69 of the AML Act):

  1. Demonstrate compliance with AML legislation by sending its internal AML documentation to PTEI.
  2. Provide information about the employee who will fulfill the role of AML officer, including his/her name, position in the company and contact details.

Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?

The requirements for a VASP from another EU country are the same as for a local company. There are no special requirements (no branch or local staff requirements) for such VASPs, they only need to fulfill the minimum requirements stipulated by the AML regulation (Section 60 of the AML Act).

What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?

As there are no authorization or licensing requirements in Hungary, the only fines foreseen for VASPs are fines for violations of AML legislation (failure to submit reports, failure to introduce AML measures, etc.). Such fines, depending on the offense, can range from 20,000  to 400 million Hungarian Florian (50 EUR to 1 million EUR).

Manimama Legal & Growth Agency provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.