Hungarian Authorities Seize $1 Million in Cryptocurrencies in Tax Evasion Probe

Hungary’s National Tax and Customs Administration (NAV) has seized cryptocurrency assets valued at $1 million as part of a larger investigation into a criminal organization suspected of evading approximately $8.29 million in taxes. The operation involved raids on 28 locations and resulted in the arrest of three individuals linked to the group.

The criminal organization, mainly involved in consumer electronics trade, allegedly exploited gaps in the European Union’s tax system. They imported tax-free electronic devices like smartphones, tablets, and solar panels from various EU countries and then sold them through a network of shell companies, avoiding value-added tax (VAT) obligations. The group frequently changed these front companies, enabling them to sell electronic devices to wholesalers and resellers at competitive prices, thus evading over HUF 3 billion in VAT.

The NAV’s operation didn’t stop at cryptocurrency confiscation. They also seized assets such as solar panels, inverters, cars, cash, real estate, and bank accounts worth more than half a billion forints. The authorities transferred the confiscated cryptocurrencies to a specially controlled wallet under NAV’s jurisdiction.

Hungary’s stance on cryptocurrency has been somewhat mixed. The governor of Hungary’s central bank proposed a European Union ban on crypto trading and mining, suggesting that EU individuals and companies could own crypto assets outside the EU, with regulators monitoring their holdings. However, Hungary has taken a different approach when it comes to Central Bank Digital Currencies (CBDCs), launching its CBDC project in collaboration with fintech company Perfinal recently.