The application for regulatory approval should not include the following statement “We are in the process of launching a cryptocurrency platform”.
Customers can exchange cryptocurrency in exchange to fiat? Will the platform allow the transfer of virtual assets? The company will be able to control clients’ wallets and private keys? Are they managing a trading platform or crediting against digital assets or thinking of releasing tokens?
These distinctions are critical when applying for a crypto-license in Georgia as the type of products and services a business plans to provide will affect its requirements for regulatory compliance documents, controls, and capital requirements.
Georgia may offer an attractive setting for fintech companies however, gaining access to its controlled virtual-asset marketplace now requires more than simply registering your company and creating a website.
First, define the Service.
Companies that provide virtual assets services to third parties are required to register as Virtual Asset Service Providers (VASP) at the National Bank of Georgia under the rules laid out by PB Services.
The scope encompasses activities including virtual-asset exchange, transfer, administration of trading platforms and custody or management. According to the regulatory information supplied the custody concept encompasses administration of a customer’s private key and wallet.
This is what makes the design of a crypto-product relevant to its regulatory status.
Before submitting an application for a license an entrepreneur who is interested in getting an e-currency permit in Georgia must sketch out the customer’s journey. What happens when a client makes a deposit of funds? Who is in charge of your wallet? Assets can they be exchanged or transferred? Who is authorized to authorize transactions?
Clare answers can help define what the business is actually going to be doing.
Your Business Plan Must Describe a Real Company
VASP applications require more than a pretty pitch deck.
Based on the information provided in the report, according to the information provided, National Bank requires a detailed plan of operation that includes financial projections for a minimum period of three years. They include the amount of revenue, expenses, and growth projections. The plan should also show that there is a genuine intention to operate within Georgia.
This is a need that deserves to be addressed as soon as possible.
Investors are able to ask questions about how quickly the business will expand. A business plan for a regulatory operation must also include details about how the business will be managed with care.
If a company is seeking a vasp license Georgia applicants must be able to link the commercial model with the compliance model instead of considering them separate documents.
AML Does not qualify for inclusion in the End
PB Services has described the preparation process as an important component of which is the controls to stop terrorist financing and money laundering.
The document specifically states that just import of an AML policy from another country is insufficient because Georgian requirements need to be incorporated into the business’ structure.
The operational systems matter as well. The business plan needs to show that the system can identify potentially suspicious and related transactions.
Practically speaking, the conformity of a platform must affect the development of the product before it can be launched. It is not recommended to design a platform before deciding how AML policies will be applied. This could lead to delay and unnecessary changes.
The services you choose to use can Have an impact on your Capital
The need for regulatory capital is a further reason to identify the business model early.
In accordance with the guidelines in the document the transfer and exchange activities such as kiosks, need 150,000 GEL. The administration of trading platforms requires 350,000 GEL and other covered services require 250,000 GEL. The maximum threshold applies when a variety of services are offered.
It’s not the same as ordinary operating capital. A proof that the requested amount is actually funded should accompany the request, and the capital should be kept throughout the duration of operation.
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.
The registration process is not the end of compliance work
The compliance calendar does not disappear with the date of approval. The requirements include regular obligations relating to risk management, cybersecurity and technology resilience. They also address the retention of records, independent reviews customer complaints, as well as records retention.
For instance an independent auditor’s view on the risk management framework should be sought within 12 months of the date of registration. As per the regulations, businesses are required to accept complaints in writing or in oral form and then review them within a month. They are also required to send statistics of complaints to the National Bank electronically each month.
These factors affect the way a serious applicant should approach licensing.
Consider the Georgian VASP as a concept for a company instead of a collection of forms that need to be filled out.
It is vital that the structure of the company, technology, AML controls and regulatory capital, as well as customer processes, are all in harmony.
Georgia offers opportunities to businesses in the field of fintech and crypto and the regulatory framework is a straightforward path to the market. However, asking about the speed at which you can get a license isn’t the best approach to begin.
It’s about being able to describe, in precise terms, what your company’s crypto operations will perform and showing that the business is ready to do it within the Georgian legal framework.