Crypto-funded debit card in Hungary

VASP Registration: Under the transposition of the EU's 5th and 6th Anti-Money Laundering Directives (AMLD5/AMLD6), custodial wallet providers are classified as Virtual Asset Service Providers (VASPs).

Obligation: VASPs, including those offering custodial services, are required to register with, or be licensed by, the Hungarian Financial Supervisory Authority (primarily the Magyar Nemzeti Bank - MNB, the Central Bank of Hungary, which oversees financial market supervision) for AML/CTF purposes.

Act CXXXVI of 2013 on the prevention and combating of money laundering and terrorist financing (Pmtv.) – This is Hungary's primary AML law, amended to include virtual asset service providers.

Purpose of Registration: This registration primarily obliges the entity to comply with AML/CTF requirements, such as customer due diligence (KYC), transaction monitoring, and suspicious activity reporting, rather than specific operational custody rules.

Authorization as a CASP: Under MiCA, any entity providing "custody and administration of crypto-assets on behalf of third parties" will be classified as a Crypto-Asset Service Provider (CASP) and will require prior authorization by a national competent authority (in Hungary, this will be the MNB).

Keep client crypto-assets and funds separate from their own crypto-assets and funds.

Maintain records and accounts that allow for the immediate segregation of client crypto-assets and funds from own assets and from those of other clients.

Return client crypto-assets and funds without undue delay upon their request.

No specific, explicit statutory insurance/bonding requirements for crypto custodians beyond general business insurance that any company would hold.

No specific, explicit mandates for the use of cold storage (offline storage of private keys) under current Hungarian law.

There are no specific, explicit statutory rules under current Hungarian law specifically for the segregation of client crypto assets from the custodian's own assets.

Issuers of EMTs:

Regulatory Treatment: EMTs are largely regulated as electronic money under MiCA, which builds upon the existing Electronic Money Directive (EMD2) (Directive 2009/110/EC) but with additional specific requirements for crypto-assets.

Issuing warnings against unlicensed service providers (often foreign entities).

Entity Targeted: Xifra Lifestyle (also known as Xifra Global, Xifra LLC). Violation Type: Unlicensed financial service provision (offering investment services related to cryptocurrency trading without the necessary MNB authorization) and operating a scheme with characteristics of a pyramid scheme. Penalty Amount: The MNB issued a public warning and a cease-and-desist order. While no specific administrative fine amount was publicly disclosed by the MNB in its initial announcement, the action effectively prohibited the entity from operating in Hungary and referred the case to law enforcement for potential criminal proceedings.

Rate: A flat 15% Personal Income Tax (PIT) is applied to the annual positive income derived from virtual asset transactions.

Corporate Income Tax (CIT): Profits derived from virtual asset activities are subject to the standard 9% Corporate Income Tax (CIT).