“We’re in the process of launching a crypto-based platform” isn’t a precise enough description of a regulation application.
Customers can exchange crypto for fiat currencies? Does the platform permit the transfer of virtual assets? Is the company in charge of the wallets of clients or keys? Does it manage a trading platform and crediting against digital assets or planning to issue tokens?
These differences are important when applying for an crypto-license in Georgia as the type of products and services a business plans to provide will affect its legal requirements such as documentation, control and capital requirements.
Georgia may offer an attractive setting for fintech companies however, entering the market for virtual assets now requires more than simply registering a firm and creating a web site.
Then, you must define the Service.
Companies that offer virtual asset 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 includes things like virtual transfer and exchange of assets along with trading platform administration and custody or management of cryptocurrency. The information on regulation states that the concept of custody extends to the management of the private keys of the client or the wallet.
This means that the design of an crypto-product important to its legal status.
A business owner who would like to get cryptocurrency licenses in Georgia should map the customer’s journey before creating the request. What happens after a client deposits assets? Who owns the account? The assets can be exchanged or transferred? Which party authorizes the transactions?
The answers are clear and help determine the exact nature of what the business will be doing.
Your business plan must describe the actual business
VASP applications also require more than a beautiful pitch deck.
Based on the information provided according to the provided information, the National Bank expects a detailed business plan, which includes projections of financials of at least 3 years, which includes revenues, expenses, as well as growth assumptions. The plan must also indicate that there is a real intention to run in Georgia.
It is important to address this issue as soon as possible.
Investors may ask questions such as how fast the business will expand. The business plan of an operation that is regulated must contain information about how it will run safely.
Companies seeking a vasp Georgia license must prepare to connect the commercial model with the compliance model, rather than considering the two documents as distinct documents.
AML can’t be added at the end
PB Services describes the preparation as a series of steps which include anti-money laundering and control of financing for terrorism.
The provided material specifically warns against simply importing a policy on AML from a different country because Georgian rules must be integrated into the framework of a business.
The operational systems play a role also. The business plan should demonstrate that the system in place by the company can detect similar and suspicious transactions from the start.
Compliance needs to be an element in the development of products. By building a platform and then determining how AML works and how it will work, you could cause unnecessary delays and even redesign.
Capital is contingent upon the services you select
Regulatory capital is another reason to identify the business model in advance.
In accordance with the guidelines in the document of origin Exchange and transfer activities including kiosks, will require 150,000 GEL. Trading platform administration requires 350,000 GEL while other covered services require 250,000 GEL. If several services are offered, the threshold that is most applicable is the one that is.
This is distinct from normal capital used for investment or operational purposes. Documentation that proves the required amount has actually been funded must accompany the application, and the capital has to remain in operation throughout its duration.
A founder planning to get crypto blockchain license in Georgia should consequently consider regulatory capital during financial planning not after the rest of the application has already been assembled.
Registration Doesn’t Finish the Compliance Work
The calendar of compliance doesn’t end with approval. The requirements listed in the document outline regular obligations related to cybersecurity and risk management as well as technology resilience, fraud risk and record retention, independent review and complaints from customers.
To get an audit report from an independent auditor on the framework for risk management, a company must register within twelve months. The business must also comply with the guidelines described to handle complaints. They must take complaints seriously, whether they’re written, verbal or electronic, to look over them in a maximum one-month period, and also to submit information on complaints electronically to National Bank every month.
These details affect the way serious applicants must apply for licensing.
Consider the Georgian VASP as a design for a company rather than a series of forms to be filled out.
A company’s structure, service model, and technology, AML controls as well regulatory capital, risk procedures and customer procedures must be in sync.
Georgia is still a great place to start fintech and crypto businesses. Its regulatory framework offers a well-defined path to the market. However, asking when you can apply for an authorization isn’t necessarily the most effective way to start.
It’s about being able in specific terms, to explain what your crypto-related business will be doing and demonstrate that the company is operating within Georgia’s legal framework.