The regulatory application should not include the following statement “We are launching a cryptocurrency platform”.
Can customers convert cryptocurrency to fiat? Will the platform allow virtual assets to be transferred? Will the company control client wallets or private keys? Are they managing a trading platform or lending against digital assets or thinking of releasing tokens?
The distinctions are significant when it comes to obtaining the crypto license in Georgia due to the services that a company is planning to provide influence its regulatory preparation and documentation, controls and capital requirements.
Georgia might be an appealing environment for fintech businesses however, gaining access to its controlled virtual-asset marketplace now requires more than just registering a business and launching a site.
Definition of the nature of service
Companies that provide virtual assets services to third parties must be registered as Virtual Asset Service Providers with the National Bank of Georgia under the framework described by PB Services.
The scope encompasses activities like virtual asset exchange and transfer, administration of trading platforms and custody or management. According to the information provided by the regulator the custody concept encompasses administration of a customer’s private keys and wallet.
This makes the design of a product in the crypto space relevant to its regulatory position.
Anyone who wants to obtain a crypto license in Georgia should map out the customer journey they intend to take before creating the application. What happens after a customer deposits assets? Who manages your wallet? Can assets be exchanged for or transferred? Who is the person who authorizes a transaction?
The answers that are precise and clear can help decide what the business is doing.
Your Business Plan Needs to be able to describe a real-world business
VASP applications require more than a visually appealing pitch deck.
According to the information supplied by according to the information provided, National Bank requires a detailed business plan that contains financial projections that cover the minimum of three years. These include the amount of revenue, expenses, and growth expectations. The plan must also demonstrate a genuine intention to operate in Georgia.
This need should be taken seriously and addressed as early as possible.
A business model designed for investors will answer questions about how quickly the business can expand. A regulation-based business plan should also explain how the operation will be conducted in a responsible manner.
For companies seeking a vasp license Georgia applicants should be prepared to connect the commercial model with the compliance model rather than treating them as unrelated documents.
AML is not possible to add at the very end
PB Services describes the preparation as a series of steps that include anti-money laundering and counter-terrorism controls.
The provided material warns that simply importing an AML policy from another country is insufficient because Georgian laws must be integrated into the company’s framework.
The operational systems must be considered in the same way. The business plan should demonstrate that the system used by the firm can identify related or potentially suspicious transactions.
In practice the compliance process should influence the product’s development prior to its launch. The process of creating a platform before asking what AML procedures will fit afterward can create unnecessary redesign and delay.
The services you choose to use can affect your capital
Determining the business model at an early stage is essential for a variety of reasons, not least the need for regulatory capital.
Based on the thresholds set forth in the source material, transfer and exchange, as well as kiosks are required to be at least 150,000 GEL. The administration of platforms for trading needs 350,000 GEL While other covered services need 250,000 GEL. If there are multiple services offered the threshold that is the highest is used.
It’s not the exact same as ordinary operating capital. A proof that the amount is actually financed is required with the application and the capital has to be maintained throughout the course of operations.
A business owner who intends to submit an application for a crypto-blockchain license in Georgia must consider the regulatory capital in the course of financial planning, not until after the remainder of the application has been completed.
The registration process is not the end of compliance work
The calendar of compliance doesn’t expire with the approval. The requirements listed in the document outline the ongoing obligations for risk management and cybersecurity security, technology resilience and fraud risk, and retention of records, independent review and customer complaints.
For instance an independent auditor’s report on the risk-management framework must be sought within 12 months of registration. Businesses must also follow the guidelines described in handling complaints. They are required to accept all complaints, whether they are written, oral or electronic, and to examine them in a maximum one-month period, and provide statistics on complaints electronically to National Bank every month.
These particulars affect the manner serious applicants must take the licensing process.
Instead of thinking of a Georgian VASP application as a set of documents required to obtain permission imagine it as the structure of an authorized business.
A company’s structure, service model and the technology used, AML controls as well the procedures for risk, capital requirements and customer processes must all be in sync.
Georgia remains a wonderful place to start fintech and crypto businesses. Its regulatory framework provides an easily-defined route to the market. However, asking how fast you can obtain an authorization isn’t necessarily the most effective way to start.
You must be able to clearly describe what your crypto-business’s goals are and prove that you’re able to adhere to Georgia’s rules.