DECLARATION OF NON-ENGAGEMENT IN PAYMENT AGENT ACTIVITIES

We hereby inform you that <Blob Solutions> LLC's activities are not subject to licensing for the following legal reasons.

Licensable activities are considered those types of activities included in the list defined by Article 43, Part 2 of the Law on Licensing of the Republic of Armenia.

Physical or legal entities are entitled to engage in activities not included in the mentioned list without restrictions unless engaging in such activities is prohibited by law.

In this case, <Blob Solutions> LLC offers a public offer through its electronic site https://emit.am/p/public-offer to an indefinite circle of people, meaning that an offer containing all essential terms of the contract has been published on the mentioned electronic site, implying the will of Blob Solutions LLC to conclude a contract with each respondent under the terms mentioned in the offer.

Blob Solutions LLC, as a party to the contract, offers the creation, management, and use of redeemable instruments. A redeemable instrument is a document or digital (virtual) asset representing a contractual obligation by which the owner (holder) obtains the right to receive certain benefits (goods, services, privileges, rights, or a combination thereof) from the other party under the conditions specified in the Contract.

According to the list defined by Article 43, Part 2 of the Law on Licensing, among other types of activities, it is mentioned that the processing and clearing of payment instruments and payment documents are considered licensable activities carried out by payment organizations.

At first glance, it may seem that Blob Solutions LLC is a payment organization. However, the official clarification by the Board of the Central Bank of Armenia regarding Point 'g' of Part 1, Article 17 of the Law of the Republic of Armenia on Payment and Settlement Systems and Payment Organizations completely refutes the status of Blob Solutions LLC as a payment organization.

According to Point 'g' of Part 1, Article 17 of the Law on Payment and Settlement Systems and Payment Organizations, accepting payments from payers in Armenian dram or foreign currency for entrepreneurial purposes with the aim of paying the beneficiary in any manner, directly or through another person providing payment and settlement services, or making payments to beneficiaries in Armenian dram or foreign currency for entrepreneurial purposes from funds received for the benefit of those persons in any manner is considered a payment service.

The Board of the Central Bank of Armenia, in its official clarification No. 2 dated September 23, 2014, referring to Point 'g' of Part 1, Article 17 of the Law on Payment and Settlement Systems and Payment Organizations, noted that, in the sense of Article 17, Part 1, 'g', a payment service provider is a person (hereinafter referred to as the payment agent) who

1. as part of their entrepreneurial activity, accepts payments from the payer intended for the beneficiary, whose (the payments’) sole purpose is the execution of a monetary transfer, and in return for these payments, the payment agent does not provide the payer with any type of property (hereinafter referred to as goods), property rights, does not provide any type of service (except for the mere monetary transfer payment service) or does not provide any document (in paper or electronic form) confirming the right to receive specific goods, property rights, or services:

2. carries out the activity mentioned in Subpoint 1 of Point 1 of this clarification through any number of payment agents or other intermediaries (any legal or physical persons or individual entrepreneurs) (various chain schemes), which, although they separate the transfer of funds into several stages, the ultimate goal (essence) of the chain’s activity is the transfer of funds from one person (payer) to another person (beneficiary). In this case, all intermediaries involved in the chain and operating in the territory of the Republic of Armenia (any legal or physical persons or individual entrepreneurs), which accept the payment and transfer it directly to the next intermediary or the beneficiary (the next link in the chain) will be considered payment agents:

3. accepts payments from payers intended for beneficiaries, which, although directed towards the payment of any type of goods or services, including the payment for the consumption of electric energy, natural gas, drinking water, mobile or fixed communication services (regardless of whether the given service, product, property right, or document has already been provided or will be provided in the future), however, the person executing the monetary transfers to beneficiaries (the payment agent) is not involved in the process of providing that service, product, property right, or document in any way (the payment agent exclusively carries out the transfer of funds from the payer to the beneficiary). In other words, the payment agent performs the activity mentioned in Subpoints 1 or 2 of Point 1 of this official clarification and provides no other services to the payer other than the execution of a monetary transfer (accepting payment from the payer and transferring payment to the beneficiary).

From the interpretation of the above legal norms, it becomes clear that Blob Solutions LLC is not a payment organization, as its activities do not involve organizing the execution of monetary transfers from the payer to the beneficiary, but rather offering the creation, management, and use of redeemable instruments. As a result, the company provides the payer with a redeemable instrument, that is, a document or digital (virtual) asset, which represents a contractual obligation by which the owner (holder) obtains the right to receive certain benefits (goods, services, privileges, rights, or a combination thereof) from the other party. The Central Bank Board has clearly stated in its clarification that a payment organization is a person who organizes the execution of monetary transfers from the payer to the beneficiary.