The regulatory application should not include the statement “We are setting up a platform for cryptocurrency”.
Customers can exchange crypto for fiat currency? Will the platform transfer virtual assets? The company will have control over client wallets as well as private keys? Are they managing the trading platform and lending against digital assets, or intending to issue tokens?
These differences are important when obtaining the cryptocurrency license in Georgia. The kind of services the company plans to provide will impact its regulatory preparation, documents, controls, and capital requirements.
Georgia offers a regulated market for virtual assets, which attracts fintech companies. However, gaining access to this market takes more effort than simply registering a company and then launching your website.
Then, you must 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 guidelines laid out by PB Services.
The scope of the concept includes things like virtual asset exchange and transfer, platform administration for trading, and cryptocurrency custody or management. The regulation’s information states that the custody concept extends to the administration of the client’s private keys, or wallet.
That makes the technical design of a crypto product pertinent to its legal 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 deposit funds? Who owns your wallet? Can assets be exchanged, or transferred? Who is the party that is able to authorize a transaction?
Clear answers help establish what the firm will be doing.
Your business plan should describe the actual business
A VASP application requires more than just a nice pitch deck.
Based on the information provided According to the information provided, the National Bank expects a detailed business plan with financial projections for at least three years, which includes revenues, expenses, as well as growth projections. The plan must also demonstrate an actual intention to operate in Georgia.
This is a requirement that needs to be considered early.
Investors may ask questions such as how quickly the business will grow. A regulatory business plan must also explain how the operation will be conducted in a responsible manner.
Georgian applicants for a vasp license shouldn’t view the commercial model as though it was unrelated. Instead they should join them.
AML cannot be added at the end
PB Services describes the preparation as a set of steps that include anti-money laundering and counter-terrorism financing controls.
The document warns that the import of an AML Policy from another country is not enough since Georgian laws must be included into the framework of a company.
It is also crucial to consider the operational systems. Business plans must show that the system of the business is able to detect related and suspicious transactions right from the beginning.
The compliance aspect must be a factor in product development. It is not recommended to build a platform before making a decision on how AML policies will be implemented. This could lead to delay and unnecessary changes.
The services you select can Impact Your Capital
The need to establish the business model in time is also due to the capital required by the regulatory authorities.
In accordance with the guidelines in the document of origin the transfer and exchange activities, including kiosks, require 150,000 GEL. Management of a trading platform for trading needs 350,000 GEL while other covered services require 250,000 GEL. If multiple services are provided the threshold which is highest applies.
This is distinct from normal capital used for investment or operational purposes. The evidence that the amount was actually paid for must be included with the application and the capital needs to be maintained throughout operations.
The person who is aspiring to obtain a crypto-blockchain permit in Georgia should consider the regulatory capital when calculating his financial plan prior to the time that the rest is completed.
Registration isn’t enough to complete the Compliance Work
The compliance calendar doesn’t end with approval. The requirements provided outline the ongoing obligations in cybersecurity, risk management, technological resilience fraud risk, record retention, independent review as well as customer complaints.
A framework for risk management For instance, a risk-management framework must receive an opinion from an independent auditor within one months of its registration. The guidelines for handling complaints require businesses to accept complaints in written, oral or electronically and evaluate them within a time limit of one month, and send details of complaints electronically to National Bank each month.
These factors affect the way serious applicants should approach licensing.
Imagine that you are using a Georgian VASP Application as the look of a controlled business.
A company’s structure, business model, and technology, AML controls as well regulatory capital, risk procedures and customer procedures must be in sync.
Georgia is a great place to start Fintech and crypto companies, and the regulatory framework is a clear path into the market. But the most effective starting point isn’t about how fast a license can be obtained.
It’s the ability, specifically, to describe what your crypto business is planning to do and be able to demonstrate that the business will be operating within the Georgian legal framework.