The regulation application should not include the statement “We are creating a cryptocurrency platform”.
Will customers exchange cryptocurrency to fiat? Will the platform allow virtual assets to be transferred? Will the company be in control of client wallets or keys? Do they plan to manage an exchange platform or lend against digital assets?
These differences are important when seeking the crypto license in Georgia due to the services that a company intends to provide will impact its preparation for regulatory compliance documents, controls, and capital requirements.
Georgia is a fantastic location for fintech companies, but for them to get into the state-regulated virtual asset market takes more than registering a business and creating a website.
Defining the service
Businesses that provide virtual assets services to third parties under the framework described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
This includes transfer of virtual assets and exchange, management of trading platforms, as well as the 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 creates the need for a crypto-product relevant to its regulation status.
An entrepreneur who is interested in getting a crypto license in Georgia should thus map out the intended customer journey prior to making the application. What happens when a customer deposit funds? Who manages the wallet? Can assets be traded, or transferred? Who is the person who authorizes a transaction?
It is important to know what the firm will be doing.
Your Business Plan Must be able to describe a real-world business
A VASP application requires more than an attractive pitch deck.
The National Bank will expect a thorough business plan with financial projections for minimum three years. The plan should contain revenue, expenses and growth estimates. The plan must also prove the genuine intention to operate in Georgia.
It is essential to deal with this issue as soon as is possible.
Investors may ask questions such as what speed the company will expand. The plan of business for regulation should also describe how the operation will operate responsibly.
Companies seeking a vasp license Georgia applicants must be able to link the commercial model to the compliance model instead of considering them separate documents.
AML cannot be added to the End
The Anti-Money Laundering as well as the Counter-Terrorism Controls on financing are one of the major components of the procedure provided by PB Services.
The document specifically warns against importing policies on AML from another jurisdiction because Georgian regulations need to be incorporated into the framework of a company.
The operational systems must be considered also. The business plan should show that the system of the company can detect suspicious transactions.
Compliance needs to be an aspect of product development. Making a platform first, and looking into what AML procedures fit in the future can create unnecessary redesign and cause delays.
Capital Depends on the Services You Choose
Knowing the business model in the earliest possible time is vital for a variety of reasons, such as regulatory capital.
According to the thresholds set forth in the source material for transfers and exchange, which includes kiosks are required to be at or near 150,000 GEL. Management of trading platforms requires 350,000 GEL while other covered services only require 250,000 GEL. When multiple services are provided the threshold that is the most applicable governs.
This is different from operating capital or capital invested. Proof that the required amount is actually funded must be included with the request, and the capital needs to be maintained throughout 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.
Registration doesn’t complete the task of ensuring compliance.
Approval isn’t the moment when the compliance calendar is removed. The guidelines provide the ongoing obligations in cybersecurity, risk management technology, fraud risk, records retention, independent reviews and customer complaints.
A risk-management framework For instance, a risk-management framework will require an opinion by an independent auditor within the 12 months of its registration. Businesses also must follow the described rules in handling complaints. They must accept complaints, whether they’re written, oral or electronic, to look over them in a maximum one-month period, and to provide data on complaints electronically to National Bank every month.
The details of these changes affect how a serious applicant should approach licensing.
Instead of thinking of the Georgian VASP application as a set of documents required for obtaining permission to use it, think of it as a design for the business that is regulated.
The structure of the business, the service model technology, AML controls, capital regulations procedures for risk, the company’s structure, and customer processes have to connect.
Georgia is still a great place to start fintech and crypto businesses. Its regulatory framework offers an easy path to market. The best place to start is to not ask about what speed a license is going to be issued.
It’s about being able specifically, to describe what your crypto business intends to accomplish and demonstrate that the company is operating within the legal framework of Georgia.