Hungarian Authorities Seize $1M in Crypto in Major Tax Evasion Sting

Hungary’s National Tax and Customs Authority (NAV) has significantly moved against cryptocurrency-fueled tax evasion. In a recent operation, NAV confiscated $1 million of digital assets from a group suspected of dodging taxes amounting to three billion Hungarian forints (HUF). This operation saw NAV’s Criminal Directorate for the West conduct raids on 28 locations. Consequently, three individuals linked to this criminal ring are now in custody.

The confiscated cryptocurrencies now reside in a specialized wallet set up by NAV specifically for this operation. Moreover, the investigation into this group had been ongoing for some time, with NAV employing undisclosed surveillance techniques.

Suspects Evade VAT in Consumer Electronics Sector

The accused group’s primary operation revolved around the consumer electronics sector. They dealt in various products, from smartphones and tablets to solar panels, where these items were allegedly procured tax-free from the European Union. However, the group sold them through various front companies, evading VAT.

This tactic gave them an unfair edge over legitimate businesses in the same sector. Two members of this group faced arrest for budget fraud, while another was apprehended after returning from Tunisia.

This isn’t Hungary’s maiden encounter with cryptocurrency-related misdemeanors. A notable incident involved Thomas Borka-Saxon, a municipal representative of the Democratic Coalition in Budapest. He resigned after being exposed for using government resources to mine Bitcoin (BTC). This event led to the seizure of his mining equipment and significantly tarnished the party’s image.

Crypto Misuse Puts Hungary on High Alert

Additionally, György Matolcsy, the head of Hungary’s central bank, has been vocal about his reservations regarding cryptocurrencies. He has supported an EU-wide ban on cryptocurrency, highlighting concerns about potential illicit activities and financial schemes. However, Hungary is also considering the introduction of a central bank digital currency (CBDC), though without any immediate plans.

The Governor of the Hungarian Central Bank has previously called for a complete ban on cryptocurrency trading. He drew parallels with China’s stringent stance against digital assets. Besides, he also referenced a proposal from Russia’s central bank. However, it’s worth noting that Russia opted for regulation over an outright ban.

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Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com

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