The regulatory application should not include the following statement “We are launching a cryptocurrency platform”.
Will customers exchange cryptocurrency for fiat? Does the platform permit virtual assets to be transferred? The company will be able to control clients’ wallets and private keys? Do they manage a digital asset lending platform that issues tokens or managing a trading platform?
Those differences matter when pursuing a crypto license in Georgia because the services a company intends to provide affect its regulatory preparation, documentation, controls, and capital requirements.
Georgia might provide a favorable business environment for fintech companies, but entering its regulated virtual-asset market now requires much more than simply registering a firm and creating a website.
First, you need to define the service.
In the framework outlined by PB Services, businesses providing covered services in the field of virtual assets for third-party clients must be registered as virtual asset service providers with National Bank of Georgia.
The scope includes the activities of virtual transfer and exchange of assets and managing trading platforms and custody or management of cryptocurrency. Importantly, the supplied legal information states that the custody concept is also applicable to administration of a client’s private key or wallet.
The design and technical aspects of the product in question is pertinent to its place with respect to regulation.
Anyone who wants to obtain cryptocurrency licenses in Georgia must therefore sketch out the desired customer journey prior to developing the application. What happens after a customer deposits assets? Who is the person who controls the wallet? Can assets be exchanged or transferred? Which authority authorizes the transaction?
Specific and clear can help decide what the business is doing.
Your business plan must detail the actual business
VASP applications need more than a visually attractive pitch deck.
Based on the information given, the National Bank requires a detailed plan of business that contains financial projections covering an minimum of three years. These include revenue, expense, and growth projections. The plan must also demonstrate that there is a real intention to run in Georgia.
This is a requirement that needs to be considered early.
Investors are able to ask questions about what speed the company will expand. The business plan of a regulatory operation must also include information on how it will be run responsibly.
Companies seeking a vasp license Georgia applicants must be able to connect the commercial model to the compliance model rather than considering them separate documents.
AML cannot be added at the conclusion
PB Services has described the procedure of preparation as a significant component of which is the controls against money laundering and terrorist financing.
The supplied material specifically warns that just taking an AML policy from a different jurisdiction is not sufficient since Georgian rules must be integrated into the company’s framework.
The operational systems matter also. The business plan should demonstrate that the business’s system firm can identify suspicious transactions.
Practically speaking, compliance needs to influence the development of products prior to launching. In the process of creating a platform and then determining the way AML will work and how it will work, you could cause unnecessary delays and redesign.
Capital Depends on the Services You Select
The business model should be determined as early as possible is crucial for a variety of reasons, such as regulatory capital.
Based on the thresholds set in the documents, kiosks and exchange activities require 150 000 GEL. Trading platform administration is required to be 350,000 GEL, while other covered services need 250,000 GEL. If several services are offered, the threshold that is highest applies.
It is not the same as ordinary operating capital. The application should be accompanied by proof that the requested amount has been financed.
A business owner who intends to submit an application for a crypto blockchain license in Georgia should consider regulatory capital prior to the start of financial planning, but not after the rest of the application is completed.
Registration doesn’t end the task of ensuring compliance.
Approval is not the point where the compliance calendar is removed. The required requirements outline ongoing obligations in cybersecurity and risk management, technology resilience and fraud risk, and retention of records, independent review and customer complaints.
A framework for risk management, for example, requires an opinion by an independent auditor within 12 month of registration. Companies must also adhere to the described rules in handling complaints. They must take complaints seriously, whether they are written, oral or electronic, to look over them within a minimum of a one-month period, and also to submit information on complaints electronically to National Bank every month.
These factors affect the way a serious applicant should approach licensing.
Instead of thinking of a Georgian VASP application as a collection of forms required to obtain permission consider it as the design of an regulated business.
The structure of a company’s business, its service model, and technology, AML controls as well the risk management procedures, regulatory capital and customer procedures must be in sync.
Georgia has opportunities for Fintech and crypto companies, and the legal framework gives a straightforward path to the market. However, asking how fast you can apply for an authorization isn’t necessarily the best way to begin.
It’s about being able with specificity, explain what your crypto-related business intends to accomplish and be able to demonstrate that the business will be doing it in accordance with Georgia’s legal framework.