Armenia Steps Up Efforts to Regulate Virtual Asset Service Providers Amid Growing Compliance Concerns
A recent workshop organized by the Organization for Security and Co-operation in Europe (OSCE) brought together financial regulators and law enforcement agencies from Armenia to strengthen the country’s regulatory framework for virtual asset service providers (VASPs). The event, held in Yerevan from June 25 to 27, aimed to enhance compliance and mitigate risks associated with the growing crypto-asset market.
Strengthening Regulatory Framework
The workshop focused on the operational dynamics of VASPs, their business models, and the complex legal dimensions governing cryptocurrency transactions. OSCE experts provided an in-depth analysis of the current regulatory environment for virtual assets, highlighting the applicability of existing measures around cryptocurrency transactions and the complexities of verifying ownership transfers on blockchain platforms.
Combating Illicit Financial Activities
Experts also delved into strategies for combating illicit financial activities within the crypto sphere, discussing associated risks and proposing robust mitigation strategies. Participants analyzed how to leverage data analytics and effective methodologies for visualizing transaction networks to uncover patterns indicative of financial crimes within crypto transactions.
Collaborative Efforts
The workshop was attended by representatives from the Financial Monitoring Center, the General Prosecutor’s Office, and the Central Bank of Armenia, as well as an expert from the National Bank of Georgia, who shared their experience in developing a regulatory framework for VASPs with OSCE support.
“The regulation of virtual assets and their service providers plays a crucial role in safeguarding financial systems against illicit activities,” said Vera Strobachova- Budway, OSCE Acting Senior Economic Officer. “By establishing robust regulatory frameworks, we enhance transparency, mitigate the risks of money laundering and terrorist financing, and foster a safer environment for innovation in the digital economy.”
International Collaboration
The workshop underscores the importance of collaborative efforts in shaping effective regulatory practices that balance innovation with accountability, ensuring sustainable growth and integrity within the virtual asset sector.
The OSCE has been actively fostering international collaboration and knowledge-sharing in the fight against financial crime and strengthening regulatory frameworks to ensure the integrity and security of global financial systems. The workshop was part of an extra-budgetary project on “Innovative policy solutions to mitigate money-laundering risks of virtual assets,” funded by Germany, Italy, Poland, Romania, the United Kingdom, and the United States.
Key Takeaways
- Armenia is strengthening its regulatory framework for VASPs to ensure compliance and mitigate risks associated with the growing crypto-asset market.
- The workshop focused on operational dynamics, business models, and legal dimensions governing cryptocurrency transactions.
- Experts discussed strategies for combating illicit financial activities within the crypto sphere and proposed robust mitigation strategies.
- Collaborative efforts are crucial in shaping effective regulatory practices that balance innovation with accountability.