Hungary seizes $1 mln in crypto assets citing tax evasion

• Hungary is not known to be very receptive towards crypto even as MiCA comes into force in the EU.
• However, the country launched a CBDC project last month.

Hungary’s National Tax and Customs Authority (NAV) has seized crypto assets worth $1 million from a group due to tax evasion, a local business magazine reported.

NAV carried out raids on 28 locations in one day, arresting three members of the group. Authorities arrested two members for budget fraud, and detained the third upon his return from Tunisia. Authorities suspect the group of evading taxes worth three billion Hungarian forints ($8.29 million).

The group operates in the consumer electronics trade. They allegedly acquired these electronic devices tax-free from the European Union (EU). Then sold them through a series of front companies to evade taxes.

Hungary’s central bank not too receptive to crypto

When China and Russia banned crypto, György Matolcsy, the governor of Hungary’s central bank, Magyar Nemzeti Bank (MNB), proposed last year that the EU should also follow the suit in putting a blanket ban on crypto trading and mining. He claimed that crypto could service illegal activities and tend to build up financial pyramids. He opined,

It is clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids… The EU should act together in order to preempt the building up of new financial pyramids and financial bubbles.

Instead, individuals and companies based in the EU could own crypto assets outside the EU and regulators would track their holdings, Matolcsy proposed.

There has not been much change in Hungary’s stance regarding crypto even as Markets in Crypto Assets Regulation (MiCA) comes into force in the EU. However, the country’s approach is a little different when it comes to central bank digital currencies (CBDCs).

Matolcsy issued a statement last year that all central banks should have the full authority to issue their CBDCs. A month ago, the country’s central bank launched

its CBDC project in collaboration with a fintech company, Perfinal. Anikó Szombati, Chief Digital Officer at the central bank, said,

… a central bank not only has to cooperate with FinTechs, but also, feel and act like FinTechs, exploring and serving client needs with the help of agility and technology.

But crypto crimes continue to be a menace for all the countries, and Hungary’s situation is no different.