It’s not accurate enough to describe a legal application like “We’re the first to launch our crypto platform”.
Customers can convert cryptocurrency to fiat? Will the platform be able to transfer virtual assets? Will the company be in control of wallets for clients or keys? Are they managing a digital asset lending platform that issues tokens or managing a trading platform?
Those differences matter when pursuing the crypto license in Georgia because the services the company plans to offer influence its regulatory preparation documents, controls, and capital requirements.
Georgia may offer an attractive setting for fintech companies, but entering its regulated virtual-asset market now requires much more than simply registering your company and launching a site.
Definition of the scope of service
Companies that offer virtual asset services to third-party clients according to the model described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
The scope includes activities including virtual-asset exchange, transfer, platform administration for trading and custody of cryptocurrency management. The regulation’s information states that the custody concept stretches to the administration of clients’ private keys or wallet.
The technical structure of the crypto product is pertinent to its place with respect to regulation.
An entrepreneur who is interested in obtaining an crypto license in Georgia should map the customer’s journey prior to making the request. What happens after a client deposits assets? Who is the person who controls the account? The assets can be transferred or exchanged? Who can authorise transactions?
Clare answers can help define what the company will actually be doing.
Your Business Plan must describe the real business
VASP applications also require more than a pretty pitch deck.
The National Bank will expect a detailed business proposal that includes financial projections for minimum three years. It should include the growth, expense and revenue expectations. The plan must also indicate the genuine intent to operate in Georgia.
This is a problem which must be addressed as soon as possible.
Investors can inquire about how fast the company will expand. A business plan that is regulated must provide a clear explanation of how the company is to be run in a responsible manner.
Companies seeking vasp Georgia license must be prepared to connect the commercial model and the compliance model, rather than thinking of the two as distinct documents.
AML Cannot be added to the End
PB Services describes the preparation as a sequence of steps that include anti-money laundering and anti-terrorism financing controls.
The supplied material specifically warns that simply the import of an AML policy from a different jurisdiction is insufficient because Georgian requirements need to be incorporated into the company’s structure.
The operational systems play a role also. The business plan must demonstrate that the company’s systems can spot related and suspicious transactions right from the beginning.
It is essential to consider compliance as a factor in product development. It is not recommended to design a platform before making a decision on how AML policies are to be implemented. This could lead to delay and unnecessary changes.
Capital Depends on the Services You Choose
The necessity of establishing the business model in time is a result of the regulatory capital.
As per the thresholds listed in the source materials, kiosks and exchange activities are required to be 150 000 GEL. The administration of platforms for trading needs 350,000 GEL in addition to other covered services require 250,000 GEL. The highest threshold applies for multiple services.
This is different from operating capital or capital investment. A proof that the amount was actually funded must accompany the application, and the capital must be maintained throughout operations.
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 isn’t the end of the compliance process.
The compliance calendar doesn’t end with approval. The requirements provided outline regular obligations that involve cybersecurity, risk management, technological resilience, fraud risk, records retention, independent review as well as customer complaints.
For instance an independent auditor’s view on the risk management framework should be obtained within 12 months after registration. Businesses must also follow the guidelines described to handle complaints. They must accept complaints, regardless of whether they’re written, verbal or electronic, to review them within a minimum of a one-month period, and provide information on complaints electronically to National Bank every month.
These details affect how a serious applicant should approach licensing.
Instead of thinking of a Georgian VASP application as a set of documents that must be completed to get permission imagine it as the design of an regulated business.
A company’s structure, business model and technology, AML controls as well processes for regulating capital, risk and customer service processes have to be coherent.
Georgia offers opportunities to crypto and fintech companies, and the legal framework is an open path to entering the market. However, asking about the speed at which you can obtain a license is not the best approach to begin.
It’s the ability, specifically, to explain what your crypto-related business plans to do and to prove that your company will be operating within the Georgian legal framework.