The regulation application should not include the phrase “We are in the process of launching a cryptocurrency platform”.
Customers can exchange crypto for fiat currency? The platform will allow the transfer of virtual assets? Is the company in charge of client wallets or keys? Are they managing an online trading platform, crediting against digital assets or planning to issue tokens?
Those differences matter when pursuing the crypto license in Georgia due to the services that a business plans to offer will impact its preparation for regulatory compliance documents, controls, as well as capital requirements.
Georgia offers a regulated market for virtual assets that attracts fintech companies. However, getting into this market takes more effort than simply registering your business and then launching your site.
Defining the scope of service
Businesses offering virtual asset services to third party within the framework outlined in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
This includes transfer of virtual assets and exchange, the administration of trading platforms, as well as management or custody of cryptocurrency. According to the regulations provided the concept of custody includes administration of a customer’s private keys and wallet.
This means that the design of a crypto-product relevant to its regulatory status.
A founder interested in obtaining a crypto license in Georgia should therefore map the proposed customer journey before preparing the application. What happens when a client deposits money? Who is the person who controls the wallet? Can assets be exchanged, or transferred? Which person is authorized approve transactions?
The answers that are precise and precise help to determine what the company will 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. The plan should contain the growth, expense and revenue assumptions. The plan must also demonstrate the genuine intent to operate in Georgia.
This is an issue that deserves to be addressed as soon as possible.
A business plan written for investors will answer questions like how fast the business can expand. A regulation-based business plan should also explain how the operation is to be run in a responsible manner.
Companies seeking vasp Georgia license should be prepared to join both the commercial model and compliance model, rather than treating the documents as distinct documents.
AML is not possible to add at the end
PB Services describes the preparation as a series of steps that cover anti-money laundering, as well as counter-terrorism controls.
The material warns specifically that importing an AML Policy from another jurisdiction will not suffice because Georgian regulations must be integrated into the company’s structure.
The operational systems must be considered in the same way. Business plans should prove that the system of the company can detect suspicious or related transactions.
Practically speaking, the conformity of a platform must affect its design before it’s released. First, establishing a platform and seeking out how AML procedures fit in the future could lead to unnecessary changes and cause delays.
Capital is Dependent on the services you select
The need to establish an early business model is also due to capital required by the regulatory authorities.
Based on the thresholds set in the source materials, kiosks and exchange activities need 150 000 GEL. Management of platforms for trading needs 350,000 GEL however other covered services need only 250,000 GEL. The maximum threshold applies when a variety of services are offered.
It’s not the exact same as normal operating capital. A proof that the requested amount is actually financed must accompany the request. Likewise, the capital has to be maintained during the entire operation.
A person who wants to apply for a crypto-blockchain license in Georgia should consider regulatory capital at the time of financial planning but not once the rest of the application has been completed.
Registration is not the end of compliance work
Approval isn’t the time when the compliance calendar goes away. It is a requirement that includes regular obligations relating to cybersecurity, risk management and technology resilience. They also address the retention of records, independent review, customer complaints, and retention of records.
In order to receive an audit report from an independent auditor on the risk management framework, a company must register within twelve months. The rules on handling complaints stipulate that businesses must accept complaints in oral, written or electronically and evaluate them within a time limit of one month, and submit data on complaints electronically to National Bank each month.
These details affect how an experienced applicant approaches licensing.
Consider the Georgian VASP as a visual design for a business rather than a series of forms to fill out.
The structure of the business, the service model technology, structure, AML controls, capital regulations processes for risk, as well as processes for customers must all be able to work together.
Georgia is a great place to start businesses in the field of fintech and crypto and the legal framework gives an easy way to enter the market. But the strongest starting point isn’t asking how quickly an approval can be obtained.
It’s the ability, specifically, to explain what your crypto-related business is planning to do and demonstrate that the company will be doing it within the legal framework of Georgia.