HUNGARY Law and Practice Contributed by: Pál Rahóty, Lakatos, Köves & Partners
• clear termination and exit/transition assistance provisions. Many of these provisions are not purely market prac - tice but are driven by regulation, particularly outsourc - ing and ICT risk requirements under sectoral rules. 10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry In Hungary, traditional financial institutions are explor - ing blockchain primarily in back-office and infra - structure use cases rather than retail-facing crypto products. Banks and financial market participants are assessing distributed ledger technology (DLT) for settlement efficiency, tokenisation of securities, digi - tal bonds, trade finance, cross-border payments and internal record-keeping. Implementation is cautious and compliance-driven: institutions typically run pilot projects, consortium- based solutions or sandbox testing, ensuring align - ment with regulation and operational resilience requirements. The focus is on efficiency, transparency and cost reduction, rather than replacing core regu - lated infrastructure. 10.2 Local Regulators’ Approach to Blockchain While MNB in principle is open to blockchain and crypto innovation through its Innovation Hub and reg - ulatory sandbox, and where on the crypto-asset front, Hungary claimed to be aligned with the EU’s MiCA regime, CASPs do not regard the scene as favourable. The EU Commission has initiated an infringement pro - cedure against Hungary for imposing additional cryp - to-asset exchange validation requirements on CASPs. 10.3 Classification of Blockchain Assets In Hungary, not all blockchain assets are treated as regulated financial instruments; classification drives regulatory treatment and is informed by both MiFID II and MiCA, as implemented locally. Assets that meet the MiFID II definition of a financial instrument (eg, tokenised securities conveying rights like dividends or voting) remain subject to traditional securities and
investment regulation, and are regulated on that basis rather than as “crypto-assets”. By contrast, most other digital assets that meet MiCA’s definition (eg, cryptocurrencies, utility tokens and stablecoins that are not e-money tokens) fall under the MiCA regime. Hungary’s implementation (via Act VII of 2024 on the Crypto-Assets Market) aligns with MiCA’s categories (electronic money tokens, asset-referenced tokens, “other” crypto-assets) and subjects them to differ - ent disclosure, governance and supervision rules, whereas traditional financial instruments continue to be regulated under the existing EU/Hungarian securi - ties framework. 10.4 Regulation of “Issuers” of Blockchain Assets In Hungary, the regulation of blockchain asset “issu - ers” depends on the classification. If the token quali - fies as a financial instrument (eg, a security token), the issuer must comply with MiFID II, the Prospectus Regulation and the MAR, including publication of an approved prospectus (unless an exemption applies). If the asset falls under MiCA, issuers of crypto-assets must publish a compliant crypto-asset white paper, while issuers of asset-referenced tokens or e-money tokens face stricter authorisation, governance and capital requirements. 10.5 Regulation of Blockchain Asset Trading Platforms In Hungary, blockchain asset trading platforms are regulated primarily under MiCA if they facilitate trad - ing, exchange, custody or execution in crypto-assets that are not financial instruments; operators must be authorised as CASPs and comply with governance, conduct, capital, AML, market abuse and transparen - cy requirements under MNB supervision. If the traded tokens qualify as financial instruments (eg, security tokens), the platform falls under MiFID II and must operate as a regulated market, MTF, OTF or licensed investment firm. Secondary trading through interme - diaries is therefore regulated under MiCA or MiFID depending on the classification, while purely peer-to- peer trading without an identifiable service provider may fall outside direct licensing but still raises AML, sanctions and market abuse considerations.
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