ENTERING THE ARMENIAN CRYPTOASSET MARKET: REGULATORY ESSENTIALS
Overview
Armenia has developed a comprehensive regulatory framework for crypto activities, positioning itself as an emerging jurisdiction. The framework is based on amendments to the Civil Code, recognizing cryptoassets as personal property, and the Law of Armenia "On Cryptoassets," effective from 4 July 2025, which is the main regulation governing the sector.
The Law mirrors the EU's MiCA Regulation and is supported by regulations from the Central Bank of Armenia (hereinafter - “CBA”). It mandates licensing and authorization regimes, requiring entities to obtain either a full license or a lighter permission, depending on the service. The Law defines ten cryptoasset service categories, sets minimum capital standards, and imposes ongoing obligations.
It also regulates public cryptoasset offerings, requiring white papers and specific advertising rules. Asset-linked tokens, including e-money tokens, face stricter requirements.
The Law prohibits market abuse, establishes supervision, and allows the CBA to impose fines and suspensions, with civil and criminal liabilities possible.
This overview offers a practical guide to the framework. for entities considering or currently engaged in cryptoasset-related activities in Armenia.
Introduction And Applicable Laws
As interest in Armenia as a jurisdiction for cryptoasset-related activities continues to grow, understanding the applicable regulatory framework has become an important consideration for market participants. This note provides an up-to-date regulatory overview of the legal regime governing the industry.
The main legal source for Armenian private law, the Civil Code, now establishes the fundamentals of the legal status of cryptoassets. The Law of the Republic of Armenia “On Cryptoassets” (hereinafter “Law”), which entered into force on 4 July 2025, establishes the principal regulatory framework governing cryptoasset-related activities in Armenia. It was developed in line with emerging global regulatory approaches to cryptoassets and resembles the EU's MiCA Regulation in both structure and content. The implementation of the Law has been accompanied by the adoption of several regulatory acts by the CBA, as well as corresponding amendments to various legislative acts.
Cryptoassets As А Distinct Type Of Property
In 2024, amendments to the Civil Code recognized cryptoassets as a distinct category of personal property. Specifically, cryptoassets are defined as property based on encryption (cryptography) that has value or certifies a right and can be transferred and stored exclusively in electronic form through decentralized ledger technology. In its turn, the Law identifies a number (non-exhaustive) of types of cryptoassets, namely - consumer tokens, e-money tokens, or asset-linked tokens. Ownership rights with regard to cryptoassets shall be certified by registration either with the distributed ledger itself (if the investor has direct access) or with the relevant custodian (in an omnibus structure).
Such regulations make cryptoassets a legitimate object of transactions and eliminate any concerns about their enforceability. However, the Civil Code imposes a limitation that any aspiring or seasoned crypto-investor should be aware of: cryptoassets may be exchanged only for other cryptoassets. Any property exchange transaction that envisages exchanging a cryptoasset for another type of property shall be null and void. Further, the Civil Code explicitly clarifies that cryptoassets cannot serve as a means of payment, except for e-money tokens.
Thus, while the regulations officially legitimize cryptoassets and guarantee the legal enforceability of transactions with them, you cannot legally use crypto to buy real-world assets like real estate, goods, or services (unless you use e-money tokens). Any contractual attempt to swap crypto for traditional property or use it as money is legally null and void, meaning the courts will not recognize or enforce the deal.
Overview Of The Law
The Law is Armenia's comprehensive legal framework for the cryptoasset market and aims to ensure consumer protection, financial stability, and market transparency.
It covers:
the scope of regulation and assets classification;
public offering of cryptoassets;
cryptoasset services;
requirements towards crypto-asset service providers (hereinafter - “CASPs”);
market manipulations; and
regulatory oversight and liability.
The Law regulates the following services with cryptoassets (hereinafter - the “Services”):
operation of a trading platform - a multilateral platform through which the matching or arrangement of purchase and sale offers for crypto-assets submitted by other persons is facilitated or organized, and transactions are concluded on the basis of such offers in accordance with the rules of the platform;
custody of cryptoassets;
trading as a principal for the purpose of providing liquidity in respect of a crypto-asset (including through the provision of two-way quotations) or executing client orders;
trading as an agent for the client (based on client orders);
receipt and transmission of trading orders issued by the client;
underwriting of cryptoassets;
management of a portfolio of cryptoassets;
consulting (advisory) services related to cryptoassets;
transfer of crypto assets on the decentralized ledger; and
issuance of asset-linked tokens.
Licensing And Authorization
An Armenian or foreign (acting through a subsidiary or a branch) entity wishing to provide Services (whether all or some others) in Armenia must obtain a license from the CBA and may not engage in activities not specified in the Law.
Banks, investment firms, investment fund managers, payment organizations, the Stock Exchange, and the Central Depository are permitted to provide certain Services without obtaining a separate license, with the permission of the CBA (a lighter regulatory regime than licensing). Namely:
1. INVESTMENT FIRM
Types of Services allowed to be provided based on CBA permissions:
- operation of a trading platform
- custody of cryptoassets
- trading as a principal
- trading as an agent for the client (based on client orders)
- receipt and transmission of trading orders issued by the client
- underwriting of cryptoassets
- management of a portfolio of cryptoassets
- consulting (advisory) services related to cryptoassets
- transfer of crypto assets
2. INVESTMENT FUND MANAGERS
Types of Services allowed to be provided based on CBA permissions:
- custody of cryptoassets
- management of a portfolio of cryptoassets
- consulting (advisory) services related to cryptoassets
Additional requirements:
- licensed investment fund managers (public investment funds)
- authorized to provide securities custody, portfolio management, and investment advisory services related to securities under the Law «On Securities Market»
3. BANKS
Types of Services allowed to be provided based on CBA permissions:
- issuance of e-money tokens
- custody of e-money tokens
- transfer of e-money tokens
Additional requirements:
- custody and transfer only of e-money tokens issued by them
4. PAYMENT ORGANIZATIONS
Types of Services allowed to be provided based on CBA permissions:
- issuance of e-money tokens
- custody of e-money tokens
- transfer of e-money tokens
Additional requirements:
- authorized to issue electronic money
- custody and transfer only of e-money tokens issued by them
5. STOCK EXCHANGE
Types of Services allowed to be provided based on CBA permissions:
- operation of a trading platform
6. CENTRAL DEPOSITORY
Types of Services allowed to be provided based on CBA permissions:
- custody of cryptoassets
The CBA adopted Regulation 7/01, setting up a framework for licensing and registering CASPs. The Regulation outlines the specific procedures, information, and documents required to obtain operational rights (under both licensing and permission regimes) in Armenia, along with the deadlines the CBA must meet to approve or reject an application.
Additionally, it establishes the rules for foreign companies looking to register a local branch, as well as the procedure for getting the CBA’s prior approval for the acquisition of a significant (qualifying) holding in an Armenian CASP.
Obtaining an initial license does not lock the CASP into a fixed business model. It may afterward apply for additional licenses.
The Main Licensing Requirements:
Registered premises and operational presence: The CASP must have a place of business in Armenia where the executive body is located. Unlike other financial firms regulated by the CBA, currently there no extensive technical requirements regarding such premises.
Management: The CASP must have qualified executive officers meeting fit-and-proper requirements. Although the CBA is entitled to interview the candidate, the fitness criteria are set by the CASP itself through its internal regulations. For most types of services, only the CEO and the AML officer are subject to registration with the CBA. CASPs engaged in the operation of a cryptoassets trading platform, custody of cryptoassets, and issuance of asset-linked tokens are also required to appoint and register risk management and cybersecurity officers. The establishment of a Board of Directors is not mandatory.
Internal auditor: For CASPs engaged in operating a cryptoassets trading platform, the custody of cryptoassets, and the issuance of asset-linked tokens (and potentially others as determined by the CBA), an independent internal audit function is mandatory. The function may either be established in-house or outsourced.
Internal policies and procedures: CASPs must adopt comprehensive internal rules covering: AML/CFT procedures;
- business continuity planning;
- information security;
- client asset segregation;
- internal audit procedures;
- operational procedures and tariffs.
Business plan: CASPs engaged in the operation of a cryptoassets trading platform, custody of cryptoassets, and issuance of asset-linked tokens must submit to the CBA a business plan, which is subject to annual update.
Governance and conduct obligations: CASPs must act professionally, maintain transaction records, disclose risks to clients, ensure fair communications, and operate dedicated websites containing prescribed information, including financial statements and service tariffs.
Prudential Requirements
The CBA adopted Regulation 7/02, which establishes the minimum capital requirements for CASPs. Those capital requirements scale directly with the complexity and risks of the Services, ranging from AMD 10 million (approximately USD 27,000.00) up to AMD 200 million (approximately USD 540,000.00). The exact tiered requirements are as follows:
- Advisory Services – Minimum Capital Requirement: AMD 10,000,000.
- The Purchase And Sale Of Crypto-Assets On A Client’s Account, The Receipt And Transmission Of Transaction Orders, Underwriting, Portfolio Management, And Transfer Of Cryptoasset – Minimum Capital Requirement: AMD 20,000,000.
- The Purchase And Sale Of Cryptoassets On The Company’s Own Account Or Custody Of Cryptoassets – Minimum Capital Requirement: AMD 50,000,000.
- Operation Of A Trading Platform – Minimum Capital Requirement: AMD 70,000,000.
- Issuance Of Asset-Linked Tokens – Minimum Capital Requirement: AMD 200,000,000.
A CASP providing Services listed in various tiers above is subject to the strictest capital requirement.
Regulation 7/02 also defines procedures for maintaining the minimum capital standard on an ongoing basis. It lists the financial components and assets that can be included in the CASP’s ongoing capital calculations, as well as liabilities or deductions that must be subtracted to ensure continuous regulatory compliance.
Public Offering, Advertising, And Marketing
As a general rule, a public offering of cryptoassets in Armenia requires the publication of a “white paper” (offering document) prior to launch. The white paper must be prepared in Armenian (other languages may also be used) and include the disclosures required under the Law and Regulation 7/04 of the CBA, including information regarding the issuer, the nature of the cryptoasset, terms of the offering, related risk factors, and other necessary information.
The public offering requirements don`t apply to offerings without compensation, newly mined cryptoassets, or consumer tokens that provide access to goods or services or allow holders to benefit from them. Exemptions are also available for certain limited offerings (e.g., offers to no more than 150 persons, small-scale offerings below the threshold established by the CBA, or offers made exclusively to qualified investors). However, these exemptions cease to apply where the issuer intends to seek admission to trading on a trading platform operating in Armenia.
The Law also establishes specific requirements for advertising and marketing of cryptoassets that are publicly offered or admitted to trading. Any advertisement must be clearly identifiable as advertising, must not contain misleading information, and, where a white paper is required, must be consistent with the information contained therein. No advertising can be made prior to publication of the white paper.
The advertising requirements do not apply to certain exempt public offerings referred to above.
Asset-Linked Tokens
In addition to the general public offering requirements outlined above, the Law sets out certain regulations governing the issuance of asset-linked tokens (including e-money) and their reserve assets. Holders must have redemption rights (particularly in case of e-money tokens, which must be redeemable at par value), and issuers are subject to ongoing prudential, reporting, and disclosure obligations. Issuers are not allowed to pay income to the holders.
Reserve assets are subject to custody, audit, and internal regulatory requirements, as well as certain investment limitations. They must be duly safeguarded via professional agents (e.g., in case of cash - on bank accounts, in case of securities - on securities accounts opened with custodians) and be segregated from the issuer's assets. The issuer is not allowed to pledge those assets or use them as collateral for its own obligations. Reserve assets can be invested only in certain conservative, low-risk instruments prescribed by the Law and secondary legislation of the CBA (e. g., government bonds).
Market Abuse
The Law prohibits market abuse in the cryptoasset sector, including insider information misuse and price manipulation. CASPs engaged in buying and selling of cryptoassets are required to establish and maintain internal procedures to detect and prevent market abuse. In addition, they must promptly notify the CBA of any reasonable suspicion that market abuse has occurred, is occurring, or is likely to occur.
Where the benefit obtained from insider information misuse or price manipulation exceeds certain thresholds, those actions may be qualified as crimes under the Criminal Code of Armenia. In such circumstances, criminal liability may apply, and sanctions may range from fines of up to twenty times the offender’s monthly income (or the applicable minimum wage where income cannot be determined) to imprisonment for up to five years, depending on the nature and gravity of the offence.
Supervision, Enforcement, And Liability
The CBA acts as the primary regulator and supervisory body overseeing cryptoasset activities. In the event of non-compliance, it may impose a range of sanctions and enforcement measures, including fines, suspension of specific activities, and other restrictions. In addition, the Law establishes civil liability for material misstatements, omissions, and misleading disclosures, as well as certain prohibited transactions or conduct.
Namely, the Law provides for substantial financial penalties. Depending on the circumstances, a fine may reach:
up to 300% of the profit gained or loss avoided as a result of the violation;
where such amount cannot be determined, up to 15% of the annual revenue or income of a legal entity, calculated on the basis of its latest audited annual financial statements; or
for individuals, up to 20,000 times the minimum monthly salary.
The consequences of non-compliance are not limited to the measures available under the Law. The Law expressly provides that its liability regime may operate alongside other forms of liability under Armenian legislation, including criminal, administrative, civil, or other liability, whether imposed as a primary or supplementary sanction.
HOW CAN WE HELP?
We have extensive experience in helping local and foreign entities to obtain licenses and authorizations for the Services, as well as advising on transactions with cryptoassets. Our team can assist with structuring your Armenian presence, preparing licensing or authorization applications, drafting AML/CFT and internal policies, preparing white papers and ensuring ongoing compliance with the Law and CBA regulations. For further information or to discuss your specific needs, contact us at info@am.andersen.com.
DISCLAIMER
This note has been prepared in June 2026, is for informational purposes only, and does not constitute legal advice. We reserve the right not to update this note should laws or regulations change.