It’s not enough precise to describe a legal application as “We’re creating our own cryptocurrency platform”.
Are customers able to convert cryptocurrency into fiat? Does the platform permit virtual assets to be transferred? Can the company manage client wallets and private keys? Is it planning to run the trading platform or lend against digital assets?
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 is an ideal place for fintech companies, but getting into its highly-regulated virtual asset market takes more than just registering a business and creating a website.
Definition of the nature of service
Companies that provide virtual assets services to third parties must register as Virtual Asset Service Providers (VASP) at the National Bank of Georgia under the framework described by PB Services.
Included in the scope are things like virtual transfer and exchange of assets and management of trading platforms and custody or management of cryptocurrency. The information on regulation states that the custody concept extends to the administration of the clients’ private keys or wallet.
That makes the technical design of a crypto product pertinent to its legal status.
A business owner who would like to get cryptocurrency licenses in Georgia should map out the desired customer journey prior to developing the application. What happens after a user deposits funds? Who manages your wallet? Assets can they be transferred or exchanged? Which party is authorized to approve transactions?
Questions that are precise and clear will help you determine what the business is doing.
Your Business Plan must describe the Real Business
VASP applications need more than an appealing pitch deck.
According to the information supplied according to the provided information, the National Bank expects a detailed business plan containing financial projections that cover at least three years, including the cost of operations, revenue, and growth expectations. The plan should also show an actual intention to operate in Georgia.
It is essential to deal with this issue as soon as you can.
Investors may ask questions such as what speed the company will expand. The business plan for an operation that is regulated must include details about how the operation will be conducted responsibly.
Businesses that seek a vasp Georgia license should be prepared to link both the commercial model and compliance model rather than thinking of the two as separate documents.
AML can’t be added at the End
PB Services describes the preparation as a series of actions that include anti-money laundering and counter-terrorism controls.
The information provided specifically warns against simply importing a policy on AML from a different state, since Georgian laws must be incorporated into the framework of the company.
It is also crucial to think about the operational systems. The business plan should demonstrate that the systems of the company can detect suspicious or related transactions.
In practice the compliance process should influence the design of a product prior to launch. First, establishing a platform and considering how AML procedures will fit afterward could lead to unnecessary changes and create delays.
Capital is contingent on the Services You Choose
Regulatory capital is another reason to determine the business model earlier.
As per the requirements in the source material for exchange and transfer, including kiosks must be at or near 150,000 GEL. Trading-platform management requires 350,000 GEL while other covered services only require 250,000 GEL. The highest threshold applies when multiple services are provided.
This is separate from ordinary capital for investment or operating. The proof that the amount requested is actually paid for must accompany the request. Additionally, the capital should be kept throughout operation.
The founder who wants to obtain a crypto-blockchain permit in Georgia should consider the capital required by Georgia’s regulatory authorities when planning his finances before the rest has been completed.
Registration isn’t the only aspect of the compliance process.
The compliance calendar doesn’t expire with the approval. The provided requirements outline ongoing obligations involving risk management, cybersecurity technological resilience fraud risk, recording retention, independent review, and customer complaints.
For example an independent auditor’s report on the risk-management framework must be obtained within 12 months of registration. The business must also comply with the described rules regarding handling complaints. They are required to accept complaints, regardless of whether they’re written, oral or electronic, to review the complaints within a maximum of one month period, and provide data on complaints electronically to National Bank every month.
These aspects can alter the way in which a serious applicant takes licensing.
Consider the Georgian VASP as a visual design for a company rather than a set of forms to be filled out.
The corporate structure, the service model technology, structure, AML controls, regulatory capital processes for risk, as well as customer processes have to connect.
Georgia continues to offer opportunities for fintech and crypto companies. Its regulatory framework provides a defined pathway to the market. The best place to start is to not ask about how fast a license can be issued.
It’s explaining precisely the things your crypto company will accomplish and showing that the business is ready to conduct it within the Georgian regulatory framework.