Remote VASP serving residents in Armenia

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.

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.

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.

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

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.

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.

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.

Law of the Republic of Armenia on Combating Money Laundering and Terrorist Financing (ՀՀ օրենքը «Փողերի լվացման և ահաբեկչության ֆինանսավորման դեմ պայքարի մասին»): This is the primary legislation. It mandates financial institutions, including VASPs, to implement robust AML/CFT measures, which inherently include sanctions screening.

Specifics: This law, originally adopted in 2004, has undergone several amendments. Crucially, amendments in 2022 specifically brought virtual asset service providers (VASPs) within the scope of obligated entities. This means VASPs are now subject to the same AML/CFT obligations as traditional financial institutions.

These amendments align Armenia with FATF Recommendation 15 on new technologies, which requires countries to regulate and supervise VASPs for AML/CFT purposes. The Travel Rule application to VASPs has been clarified as distinct from the core Recommendation 15 VASP regulatory requirements.

Identification and Verification of Identity:

Reporting Obligation: If a VASP knows, suspects, or has reasonable grounds to suspect that funds, virtual assets, or other assets are the proceeds of a criminal activity, or are related to terrorist financing, it must immediately file a Suspicious Transaction Report (STR) with the Financial Monitoring Center (FMC) of the CBA.

Period: Records related to customer identification data, beneficial ownership information, transaction data (including virtual asset addresses, transaction hashes, amounts, and timestamps), and any STRs filed must be kept for a minimum of five (5) years after the business relationship has ended or after the date of the transaction.

Regulations and Decisions of the Central Bank of Armenia (CBA): The CBA issues specific rules and guidelines that obligated entities, including VASPs, must follow to comply with the AML/CFT Law. These provide practical guidance on implementing customer due diligence, suspicious transaction reporting, and record-keeping.

Role: The CBA is the main financial regulator in Armenia and is responsible for licensing, supervision, and enforcement of AML/CFT requirements for financial institutions, and now, VASPs. It sets the regulatory framework and conducts oversight to ensure compliance.

The Financial Monitoring Center (FMC) operates under the Central Bank of Armenia, but since July 2025, AML/CFT oversight has been expanded to include the State Revenue Committee’s Centralized Monitoring Center and CertScan system, along with new reporting obligations for designated non-financial entities such as lawyers, notaries, and accounting firms. Financial intelligence and monitoring are now shared across multiple agencies and private-sector gatekeepers, not solely the CBA’s FMC.

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. 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.

Armenian authorities are conducting mass raids and investigating nearly 40 individuals for money laundering, indicating that the situation has progressed beyond the initial multiple arrests and asset freezes described in the claim.