It’s not accurate enough to describe a legal application like “We’re opening our crypto platform”.
Are customers able to exchange cryptocurrency for fiat? Will the platform transfer virtual assets? Does the company have control of client wallets or keys? Are they managing a lending platform for digital assets and issuing tokens, or managing a trading platform?
These differences are important when applying for a crypto-license within Georgia as the type of services a company plans to provide will affect its regulatory requirements and documentation, as well as control and capital requirements.
Georgia might provide a favorable business environment for fintech companies however, entering the market for virtual assets now requires more than simply registering your company and launching a site.
Then, you must define the Service.
Companies that offer virtual asset services to third parties as per the guidelines in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
The scope encompasses activities like virtual asset exchange and transfer, administration of trading platforms and custody or management. Importantly, the supplied regulation states that the custody concept also extends to the administration of a customer’s private key or wallet.
The technical design of the cryptocurrency product is crucial to its status with respect to regulation.
Before submitting an application for a license the founder looking to obtain an e-currency license for Georgia must outline the customer journey. What happens when a customer deposits funds? Who owns your account? Are assets able to be traded or transferred? Who is the one who is able to authorize a transaction?
Specific and precise help to determine what the company will be doing.
Your Business Plan Has to Describe a Real Business
A VASP application requires more than just a nice pitch deck.
According to the provided information The National Bank expects a detailed business plan containing financial projections of at least 3 years, which includes the cost of operations, revenue, and growth expectations. The plan should also show the genuine intention to operate in Georgia.
This is a requirement that deserves to be addressed early.
Investors are able to ask questions about how quickly the business will expand. The business plan for regulatory compliance should also describe how the operation will run 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 has described the preparation process as a major component of which is the controls against financial crime and the financing of terrorists.
The document specifically warns against importing policies on AML from another jurisdiction because Georgian laws must be integrated into the overall framework of a business.
It is also important to think about the operational systems. The business plan should show that the system of the business can spot suspicious transactions or those that may be related to them.
In the real world AML compliance must influence the product’s development prior to its launch. Building a platform first and looking into what AML procedures will fit afterward can create unnecessary redesign and delay.
Capital is Dependent on the services you select
Regulatory capital is another reason to determine the business model early.
As per the thresholds set out in the document of origin the transfer and exchange activities which include kiosks, are required to be 150,000 GEL. The administration of trading platforms requires 350,000 GEL while other covered services require 250,000 GEL. When multiple services are provided the most appropriate threshold applies.
This is separate from ordinary capital investment or operating capital. The application has to be accompanied by evidence that the amount requested has been financed.
A founder who is planning to apply for a crypto blockchain license in Georgia must consider the regulatory capital prior to the start of financial planning, not once the rest of the application has been completed.
Registration Doesn’t Finish the Compliance Work
Approval isn’t the moment when the compliance calendar disappears. The guidelines provide ongoing obligations involving cybersecurity, risk management technological resilience and fraud risk, as well as records retention, independent reviews and customer complaints.
A risk management framework such as a risk management framework, for instance, will require an opinion by an independent auditor within the 12 months from the date of registration. According to the rules, businesses must accept complaints either in writing or in oral form and then review them within a month. They must also send statistics of complaints to the National Bank electronically each month.
These details can change the way in which a serious applicant takes licensing.
Imagine the Georgian VASP as a design for a company rather than a series of forms to be filled out.
The structure of the business, the service model and technology AML controls, capital regulations processes, risk management, and the customer’s processes must connect.
Georgia is a good place to start fintech and crypto companies. The regulatory framework it has provides an easily-defined route to the market. However, asking about the speed at which you can get a license isn’t the best way to begin.
It’s the ability, specifically, to detail what your crypto company plans to do and to demonstrate that the company will be operating within Georgia’s legal framework.