“We’re launching a crypto platform” isn’t a precise enough description of a regulation application.
Can users exchange crypto to fiat currencies? Does the platform permit the transfer of virtual assets? The company will have control over wallets for clients as well as private keys? Are they administering a digital asset lending platform, issuing tokens, or running a trading system?
These differences are important when obtaining a cryptocurrency license to operate in Georgia. The services the company plans to provide will impact its regulatory preparation, documents control, documents, and capital requirements.
Georgia might be an appealing setting for fintech companies but to enter its virtual-asset marketplace now requires more than just registering a business and creating a website.
Then, you need to define the service.
Businesses that offer virtual assets services to third parties under the framework described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
The scope covers activities like exchange of virtual assets and transfer, trading-platform administration and custody or management. Importantly, the supplied regulation states that the custody concept is also applicable to managing a client’s private keys or wallet.
This makes the design of a crypto product relevant to its regulatory status.
A founder interested in obtaining a crypto license in Georgia should therefore map the proposed customer journey before preparing the application. What happens when a customer makes a deposit of their funds? Who is the person who controls the wallet? Assets can they be exchanged or transferred? Who is the party that has the authority to approve a transaction?
A clear understanding of the answers is helpful to clarify what the company is actually doing.
Your Business Plan must describe the real business
VASP applications also require more than just a gorgeous pitch deck.
Based on the information provided in the report, the National Bank requires a detailed plan of business with financial projections for at least three years. This includes revenue, expense, and the growth forecast. The plan must also demonstrate an actual intention to operate in Georgia.
It is essential to deal with this issue as soon as you can.
Investors can inquire about what speed the company will expand. The business plan that is regulated must also describe how the operation will operate responsibly.
Georgian applicants for a vasp licence shouldn’t treat the commercial model as if it were unrelated. Instead they should join them.
AML cannot be added at the End
PB Services describes the preparation as a set of steps that cover anti-money laundering, as well as counter-terrorism financing controls.
The information provided specifically warns against importing a law on AML from a different state, since Georgian laws must be integrated into the overall framework of a company.
Furthermore, the operational systems are vital. The business plan should demonstrate that the system used by the business can spot suspicious transactions or those that may be related to them.
In practice AML compliance must influence the design of a product prior to launch. In the process of creating a platform and then deciding on how AML will work in the future, you risk causing delay and unnecessary changes.
Capital is Dependent on the Services you choose
Another reason is regulatory capital. to establish the business model before.
Based on the guidelines in the source material for transfers and exchanges, including kiosks, they must have at minimum 150,000 GEL. Administration of trading platforms is required to be 350,000 GEL While other covered services need 250,000 GEL. If multiple services are provided, the threshold that is highest applies.
This differs from operating capital or capital investment. A proof that the requested amount is actually financed must accompany the request. Additionally, the capital must be maintained during the entire operation.
A founder planning to get crypto blockchain license in Georgia must therefore consider regulatory capital when planning financial plans not until the rest of the application is put together.
Registration doesn’t complete the compliance Work
The compliance calendar doesn’t disappear at the moment of approval. The provided requirements outline regular obligations that involve risk management, cybersecurity technology and fraud risk, as well as record retention, independent review and complaints from customers.
In order to obtain an audit-free opinion from an independent source on the risk management framework, a company must register within 12 months. As per the regulations, companies must take complaints in writing or in oral form and review them within one month. They also have to submit statistics on complaints to the National Bank electronically each month.
These aspects can alter the way in which a serious applicant is approached when it comes to licensing.
Imagine a Georgian VASP Application as the design of an controlled business.
It is crucial that the corporate structure as well as the technology used, AML controls and regulatory capital, in addition to customer processes, are in sync.
Georgia is still a great place for fintech and crypto businesses. The framework for regulation provides an easy path to market. But the strongest starting point isn’t determining how quickly an approval can be obtained.
It’s about being able with specificity, detail what your crypto company is planning to do and demonstrate that the company will be doing so in accordance with the Georgian legal framework.