Armenia -- Licensing Requirements Regulatory Overview

**Regulator/Enforcement Body:** Investigative Committee of Armenia, Prosecutor General's Office of Armenia, often in cooperation with law enforcement agencies from other countries (e.g., Russia, Georgia, US).

**Entity Targeted:** Individuals and organized criminal groups involved in establishing and operating large-scale fraudulent cryptocurrency investment schemes, often promising high returns from "mining farms" or fake trading platforms.

**Violation Type:** Large-scale fraud (often under Article 178 of the Criminal Code of Armenia), money laundering (Article 190), illegal entrepreneurship (Article 188), and sometimes other related criminal offenses.

**Direct Fines:** Not a simple "penalty amount" like a regulatory fine. These are criminal cases. Penalties typically involve **arrests, pre-trial detention, asset freezes/seizures (often multi-million dollar amounts in various currencies and cryptocurrencies), and eventual criminal conviction leading to significant prison sentences and restitution orders.**

**Examples of Seized Assets:** Reports mention seizures of large sums in fiat currency, cryptocurrency, real estate, and luxury vehicles. For instance, some cases involved alleged damages amounting to tens or hundreds of millions of USD.

Ongoing investigations and arrests in darknet- and drug‑trafficking cases have been reported continuously over multiple years, with prominent cases in late 2022 and early 2023 as well as in subsequent years, including 2024 and beyond.

**Outcome:** Multiple arrests of individuals involved, ongoing criminal proceedings, freezing and seizure of assets, and international cooperation to track down perpetrators and recover funds. As these are complex criminal cases, final verdicts and sentences can take significant time.

A criminal case under Articles 188 and 190 of the RA Criminal Code related to a crypto company was initiated, but the subsequent Armenian Court of Appeal ruling declaring the detention of businessman Samvel Karapetyan illegal indicates that the legal basis or enforcement of such detentions is not consistently upheld, undermining the characterization of a sustained proactive approach.

**Arka.am (Armenian news agency) - January 2023:** Report on a criminal case involving large-scale fraud through a fake crypto investment company.

**Investigative Committee of Armenia (Official Site) - General Press Releases (search for "crypto" or "fraud")**: While specific press releases detailing finalized penalty amounts are less common for ongoing cases, the committee regularly publishes updates on various criminal investigations. Direct links to specific crypto-related fraud final judgments within the last 3 years with specified fines are challenging to isolate without an in-depth search of their Armenian archives for specific case numbers. However, their news section frequently covers arrests and initiations of criminal cases:

https://investigative.am/news (You may need to use translation and search terms like "կրիպտո" (crypto) or "խարդախություն" (fraud)).

**Lack of Specific Legislation:** There is no dedicated law in Armenia regulating virtual assets or stipulating licensing requirements for crypto businesses. This creates a significant degree of legal uncertainty for operators.

**Central Bank's Stance:** The Central Bank of Armenia (CBA) has consistently maintained a cautious and conservative stance on cryptocurrencies. It has issued warnings to the public about the high risks associated with virtual assets, emphasizing that cryptocurrencies are **not legal tender** in Armenia and are not regulated or supervised by the CBA. They do not recognize cryptocurrencies as a form of electronic money, payment instrument, or security.

While specific English-language press releases detailing their explicit stance on licensing are hard to pinpoint on their main site, their general position is one of caution and non-recognition as regulated financial instruments.

**Central Bank of Armenia Website:** https://www.cba.am/

Existing laws in Armenia may provide an indirect foundation, but France and Italy are enacting new, direct laws defining antisemitism, aiming to supersede indirect applicability; the indirect approach is becoming insufficient or supplemented by explicit new statutes.

**Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Law:** This is the most significant piece of legislation relevant to virtual asset activities. Armenia, as a member of international bodies, adheres to FATF recommendations. The Law on Combating Money Laundering and Terrorist Financing (Հայաստանի Հանրապետության օրենքը «Փողերի լվացման և ահաբեկչության ֆինանսավորման դեմ պայքարի մասին») likely applies to entities dealing with virtual assets, even if not explicitly named as "VASPs" in the law. This means any entity facilitating the transfer, exchange, or custody of virtual assets would be expected to implement robust AML/KYC procedures.

While an English version with a direct government URL is not readily available, the official Armenian law can be found on legal databases in Armenia.

**Securities Regulations:** If a virtual asset is structured in a way that it qualifies as a security under Armenian law (e.g., representing ownership shares, debt, or a right to future profits), then it would fall under the regulation of the CBA, which supervises the securities market. This would require licenses for offering, trading, or managing securities.

**Payment System Regulations:** If a crypto-related service involves the processing of fiat currency (e.g., converting AMD to crypto or vice versa), it may inadvertently trigger requirements under the Law on Payment and Settlement Systems and Payment Organizations, potentially requiring a license for a payment organization or payment system operator from the CBA.

**Law on Payment and Settlement Systems and Payment Organizations (Armenian):** https://www.cba.am/AM/laws/gorc_bn/pay_sys.pdf (PDF in Armenian)

**Crypto-to-Crypto:** Generally unregulated. Operators function in a legal grey area.

**Fiat-to-Crypto / Crypto-to-Fiat:** If these activities are deemed by the CBA to fall under money transmission, currency exchange, or payment services, then a license for a payment organization or a foreign currency exchange office might be required. However, the CBA has not explicitly applied these existing licenses to cryptocurrency operations.

**Custody Providers:** No specific license for virtual asset custody. Traditional banking or financial institution licenses are distinct and are not typically granted for pure crypto custody services.

**Payment Processors (Crypto-only):** If purely processing crypto, there's no specific license. If they involve fiat, the situation is similar to fiat-to-crypto exchanges, potentially needing a payment organization license, though this is not explicitly clarified for crypto firms.

**Capital Requirements:** Traditional financial licenses in Armenia (e.g., for banks, payment organizations) have substantial minimum capital requirements (e.g., AMD 1 billion for banks, AMD 50 million for payment organizations). Should crypto firms ever be licensed, similar requirements would likely be imposed.

**AML/KYC Compliance:** This is the most certain requirement. Any entity dealing with virtual assets in Armenia would be expected to:

Implement robust Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures.

Monitor transactions for suspicious activity.

Report suspicious transactions to the Financial Monitoring Center (FMC) of the CBA, which acts as Armenia's Financial Intelligence Unit (FIU).

**Financial Monitoring Center (FMC) of the CBA:** https://www.cba.am/en/fmc/ (English) | https://www.cba.am/AM/fmc/Pages/default.aspx (Armenian)

**Local Presence:** If a company wishes to operate legally as a business entity in Armenia, it must be registered as a local legal entity (e.g., LLC, CJSC) and maintain a registered office (legal address) in Armenia. Directors and key personnel are not required to reside locally or meet specific local residency eligibility criteria; foreigners can fully own and direct such entities.

Strong corporate governance, internal controls, and risk management frameworks are standard expectations for crypto and other financial entities, with rising enforcement and specific guidance for digital assets.

**Technology and Security:** Compliance with data protection laws and implementation of robust cybersecurity measures would be implicitly required, especially for handling sensitive customer data and virtual assets.

Submitting a detailed application to the Central Bank of Armenia.

Under current U.S. (AM) regulatory requirements, FDA medical device quality system regulations (including QMSR) do not require manufacturers to provide comprehensive business plans, financial projections, or general operational manuals as part of licensing; they focus on quality system documentation related to product safety and effectiveness rather than traditional business or financial planning documents.

Demonstrating compliance with capital requirements.

Submitting documentation for shareholders, directors, and key personnel (fit and proper tests).

CBA negotiations in the WNBA and similar leagues can involve protracted, sometimes contentious discussions over issues like pay structure and revenue sharing, leading to delays that go beyond a straightforward, orderly review and approval process.

**Investment of Money/Assets:** Whether an investor provides assets (including other cryptocurrencies) in exchange for the token.

**In a Common Enterprise:** Whether the investor's assets are pooled with those of other investors, and all are subject to the same risks and opportunities of the project.

Whether the investor expects to earn profits primarily through appreciation in value, dividends, or other returns, including gains derived from the entrepreneurial or managerial efforts of others.

**Derived from the Efforts of Others:** Whether the anticipated profits are primarily derived from the entrepreneurial or managerial efforts of the issuer or a third party, rather than the investor's own efforts.

Tokens that represent traditional securities such as shares, bonds, units of collective investment schemes (e.g., investment funds), or derivatives.

Tokens that provide holders with rights analogous to those of shareholders (e.g., voting rights, profit distribution, liquidation rights) may be classified as securities, but such classification is context-dependent and not automatic; many governance tokens are structured to avoid security status despite offering some shareholder-like rights.

Tokens whose primary purpose is to provide an investment return based on the issuer's or a third party's efforts, often without immediate utility for a product or service.

Examples: ICOs structured as equity raises, debt instruments tokenized, tokens representing fractional ownership in real estate or other assets, and tokens linked to a share of future profits.

Generally **not** considered securities if their primary purpose is to grant access to a specific product or service on a blockchain network (e.g., platform access, voting on governance, payment for services) and they have immediate utility.

**However:** A utility token can be reclassified as a security if it is marketed primarily as an investment, if its value is speculative, or if its functionality is not yet available at the time of sale, making the purchase purely for speculative future gain.

Payment stablecoins are generally not securities under federal securities laws, subject to the terms of the GENIUS Act; other crypto assets are classified based on their function (e.g., digital commodities, digital collectibles, digital tools, or digital securities)

Issuers conducting a public offering of security tokens are now required to submit a crypto-asset offer document under CBA Regulation 7/04, which has replaced the general prospectus requirements under the Law on Securities Market for such offerings, effective 31 January 2026.

**Disclosure Obligations:** Issuers of security tokens would be subject to ongoing disclosure requirements, similar to publicly traded companies, including periodic financial reporting and notification of significant events.

**AML/CFT Compliance:** All entities dealing with virtual assets, including security tokens, are subject to the "Law on Combating Money Laundering and Terrorist Financing" (ՀՀ օրենք «Փողերի լվացման և ահաբեկչության ֆինանսավորման դեմ պայքարի մասին»), requiring customer due diligence (KYC), transaction monitoring, and suspicious activity reporting.

**Licensed Platforms:** Platforms facilitating the secondary trading of security tokens would need to be licensed as securities exchanges or multilateral trading facilities (MTFs) by the CBA, adhering to strict rules regarding market integrity, transparency, investor protection, and operational resilience.

**Broker-Dealer Licenses:** Entities acting as brokers or dealers in security tokens would require appropriate licenses from the CBA.

Licensed virtual asset service providers (VASPs) in Pakistan may now access formal banking services, and are subject to AML/CFT compliance as a condition of licensing under the central bank's new circular; however, the claim that all VASPs facilitating secondary trading universally must comply with AML/CFT regulations is an overstatement, as unlicensed VASPs remain banned from banking and their regulatory status is not directly addressed by the new directive.

**Warnings and Advisory Statements:** The CBA has consistently issued public warnings regarding the risks associated with cryptocurrencies, including volatility, lack of regulatory oversight for certain activities, and the potential for fraud. These warnings emphasize that existing financial regulations *do* apply where the substance of a crypto activity matches regulated financial instruments.

**Focus on AML/CFT:** A primary area of regulatory focus and enforcement has been on ensuring compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) obligations by entities dealing with virtual assets. While not directly "securities" enforcement, failure to comply can lead to significant penalties.

**Preventative Measures:** The CBA has historically taken a cautious stance, advising financial institutions against dealing with cryptocurrencies that are not clearly defined or regulated, especially those that could pose systemic risks or compromise financial stability. This preemptive approach limits the scope for significant *unregistered securities* cases if financial institutions are already deterred.

**Application of General Financial Laws:** In cases where a crypto project clearly falls under an existing category of financial services (e.g., investment fund, payment system, securities brokerage), the CBA would apply the relevant laws and licensing requirements, and non-compliance would lead to enforcement under those specific statutes.

The Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing has been amended, with new provisions entering into force on August 8, 2025.

*Note:* This is the fundamental law defining what constitutes a security and regulating the securities market.

**Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing (Փողերի լվացման և ահաբեկչության ֆինանսավորման դեմ պայքարի մասին ՀՀ օրենք):**

*Note:* This law includes definitions for "virtual assets" and "virtual asset service providers" for AML/CFT purposes, making it relevant for any entity dealing with crypto.

**Central Bank of Armenia (CBA) Official Website:**

*Note:* The CBA frequently publishes news, press releases, and guidance on financial markets, including statements regarding cryptocurrencies and associated risks. While not formal laws, these indicate their regulatory stance and interpretation of existing laws. Searching the CBA's news archives for "cryptocurrency," "virtual assets," or "digital assets" can provide insights into their approach.