Self-custodial wallet / non-custodial software in Albania
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is conditionally permitted in Albania with a local entity, subject to AML obligations and none licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- None
- Last updated
- 2026-07-13
Key Restrictions
- The publisher does not itself offer DLT services (no custody, no exchange, no transfer of virtual assets); software publishing alone is not a licensable activity under Law No. 110/2020.
- If the software publisher does not hold, control, or access user private keys, it does not meet the definition of a VASP/DLT service provider under Albanian law.
- No local entity requirement applies to pure software publishing — incorporation in Albania is not triggered.
Key Risks
- Regulatory boundary risk: if any ancillary service (e.g., staking integration, fiat on-ramp referral fee) crosses the line into 'safekeeping and/or administration of virtual assets' (al.aml.safekeeping-andor-administration-of-virtual), the operator could be deemed a DLT service provider retroactively.
- Enforcement precedent from al.enforcement.entity-targeted-faruk-fatih-zer shows Albanian authorities have a track record of pursuing virtual-asset-related criminal cases, so any perception of user harm or fraud could attract prosecutorial attention.
- MiCA alignment of Albanian law may expand definitions; future amendments could capture non-custodial software publishers if they are deemed to 'enable control' over virtual assets.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Law No. 110/2020 "On Financial Markets Based on Distributed Ledger Technology": This is the foundational legal act regulating DLT-based financial markets and virtual assets in Albania. It defines virtual assets, DLT service providers, and sets out licensing and operational requirements.
Authorization from FSA: Any entity intending to offer DLT services, including custody of virtual assets, must obtain prior authorization from the FSA (Article 12).
Regulatory Reference: Articles 12-16 of Law No. 110/2020 and subsequent secondary legislation/regulations issued by the FSA.
Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
Law No. 119/2019 "On Preventing Money Laundering and Terrorism Financing" (Ligji Nr. 119/2019 "Për parandalimin e pastrimit të parave dhe financimit të terrorizmit").
Entity Targeted: Faruk Fatih Özer, founder and CEO of the Turkish cryptocurrency exchange Thodex. Violation Type: International fraud, money laundering (related to the collapse of the Thodex exchange, which defrauded hundreds of thousands of users of an estimated $2 billion). The Albanian action related to his illegal entry and residence, and the execution of the international arrest warrant. Penalty Amount (Albania): No specific "penalty amount" was imposed by Albanian authorities on Özer directly for the crypto fraud. The outcome in Albania was his arrest and successful extradition. Outcome: Faruk Fatih Özer was arrested in Vlora, Albania, following an international manhunt. After a period of legal appeals, he was extradited to Turkey, where he faced trial. In Turkey, he was subsequently sentenced to 11,196 years in prison in September 2023 for aggravated fraud, leading a criminal organization, and money laundering.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — pure non-custodial wallet software publishing that never holds or controls user private keys does not trigger VASP/DLT service-provider licensing or AML obligations under Albanian Law No. 110/2020, but any ancillary service that could be construed as 'safekeeping or administration' of virtual assets would bring the operator into the licensing regime.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?