It’s not accurate enough to define a regulatory application like “We’re the first to launch our cryptocurrency platform”.
Are customers able to convert cryptocurrency into fiat? Can the platform be used to move virtual assets? Will the company control client wallets or private keys? Do they plan to manage the trading platform or lend against digital assets?
These differences matter when seeking the cryptocurrency license to operate in Georgia. The type of service an organization plans to offer will impact its regulatory preparation, documents control, documents, and capital requirements.
Georgia could be a desirable business environment for fintech companies, but entering its regulated market for virtual assets now requires more than just registering a business and launching a site.
Defining the service
Businesses providing virtual-assets services for third parties must register as Virtual Asset Service Providers to the National Bank of Georgia under the guidelines laid out by PB Services.
This includes the transfer of virtual assets, exchange, management of trading platforms and the administration or custody of cryptocurrency. The regulations state that the custody concept extends to the administration of the private keys of the client or the wallet.
That makes the technical design of a product in the crypto space 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 the customer deposits their assets? Who owns your wallet? Are assets able to be traded or transferred? Who authorizes transactions?
The clarity of the answers can help to establish what the firm is actually doing.
Your business plan must detail a real business
A VASP application also requires more than a beautiful pitch deck.
Based on the information provided The National Bank expects a detailed business plan containing financial projections that cover at least three years, including revenues, expenses, as well as growth assumptions. The plan must also indicate the intention to conduct business within Georgia.
It is crucial to tackle this issue as quickly as you can.
Investors are able to ask questions about how fast the company will grow. The business plan for any regulatory activity must contain details on how the operation will be conducted in a responsible manner.
Businesses seeking vasp Georgia license must prepare to link the commercial model and the compliance model rather than treating the documents as distinct documents.
AML cannot be added at the end
PB Services has described the preparation process as a major part of it is the measures to prevent money laundering and terrorist financing.
The warnings are specific to the importation of an AML Policy from another country is not enough since Georgian regulations must be integrated into a business’s framework.
The operational systems play a role as well. The business plan needs to demonstrate that the system in place by the company can detect similar and suspicious transactions from the outset.
Practically speaking the compliance process should influence product development before launch. Making a platform first, and considering what AML procedures fit in the future can create unnecessary redesign and lead to delays.
The services you select can Impact Your Capital
The need for regulatory capital is a further reason to determine the business model earlier.
In accordance with the guidelines in the document, exchange and transfer activities, including kiosks, require 150,000 GEL. Management of a trading platform for trading is required to be 350,000 GEL and other covered services need 250,000 GEL. If multiple services are provided the threshold which is most affluent applies.
It’s not the exact same as ordinary operating capital. Evidence that the required amount was actually funded must be submitted with the application and the capital should remain in operation throughout its duration.
The person who is aspiring to obtain a crypto-blockchain license in Georgia must therefore consider the regulatory capital in his budgeting process, not after the rest has been completed.
Registration Doesn’t Finish the Compliance Work
The approval is not the point at which the compliance calendar goes away. The requirements listed in the document outline continuing obligations in cybersecurity and risk management technology resilience, fraud risk as well as records retention, independent review and customer complaints.
For instance an independent auditor’s report on the risk management framework should be obtained within 12 months of the date of registration. Businesses must also follow the described rules regarding handling complaints. They are required to accept complaints, whether they are written, oral or electronic, to review them in a maximum one-month period, and also to submit figures on complaints submitted electronically to National Bank every month.
These factors can affect the way in which a serious applicant approach licensing.
Consider the Georgian VASP as a style for a business rather than a set of forms that need to be filled out.
A company’s structure, business model and technology, AML controls as well the procedures for risk, capital requirements and customer procedures must be in sync.
Georgia remains a wonderful location for crypto and fintech companies. Its regulatory framework offers an established path to market. However, asking about the speed at which you can receive an approval isn’t the best way to begin.
It’s being able, specifically, to describe what your crypto business plans to do and to be able to demonstrate that the business will be operating in accordance with the legal framework of Georgia.