Self-custodial wallet / non-custodial software 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.

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.

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.

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).

Scope: This authorization is comprehensive and covers specific operational, organizational, and prudential requirements, going far beyond mere AML registration.

No formal legal definition of a "qualified custodian" specifically for crypto assets under current Hungarian law.

However, general civil law principles, fiduciary duties, and good business practices would strongly suggest and often require such segregation to protect client interests in case of insolvency or operational issues.

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.

MNB Warnings: The MNB often issues general warnings to consumers about the risks of crypto, or specific warnings about unlicensed foreign entities, without a formal "fine" or "penalty amount" attached, but these are crucial in protecting consumers and maintaining market integrity.