The regulatory application should not contain the words “We are launching a cryptocurrency platform”.
Are customers able to convert cryptocurrency into fiat? Will the platform allow the transfer of virtual assets? The company will be able to control clients’ wallets and private keys? Is it managing an online trading platform and crediting against digital assets or thinking of releasing tokens?
These differences are essential when applying for the crypto-license in Georgia as the type of services a company is planning to provide will affect its regulatory requirements, documentation, control, and capital requirements.
Georgia offers a market that is regulated for virtual assets that is appealing to fintech companies. However, getting into this market is more work than simply registering a company and launching your website.
First, define the Service.
Businesses offering virtual asset services to third-party clients according to the model described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
The scope encompasses activities such as virtual-asset exchange and transfer, management of platforms for trading and custody of cryptocurrency management. As per the information provided by the regulator the concept of custody includes administration of the customer’s private key and wallet.
This means that the design of an crypto-product important 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 after a user deposits assets? Who controls the wallet? Can assets be traded, or transferred? Who is the party that has the authority to approve a transaction?
It is important to know the exact nature of what the business will be doing.
Your Business Plan Should Describe the real business
A VASP application requires more than just a nice pitch deck.
Based on the information given, according to the information provided, National Bank requires a detailed plan of business that contains financial projections that cover an minimum of three years. These include expenses, revenue, and growth projections. The plan must also prove the genuine intention to be a business in Georgia.
This is a requirement that deserves to be addressed as soon as possible.
A business plan designed for investors will answer questions about how quickly the business can expand. The business plan of an operation that is regulated must include details about how it will be run in a responsible manner.
Companies that are looking for a license to use vasp Georgia applicants should be prepared to link the commercial model with the compliance model, rather than considering them separate documents.
AML is not able to be added at the end
PB Services describes the preparation as a sequence of steps that includes anti-money laundering as well as anti-terrorism financing controls.
The document specifically states that simply taking an AML policy from another country isn’t enough because Georgian regulations must be integrated into the firm’s framework.
The operational systems are important in the same way. The business plan must prove that the company’s system can recognize potentially suspicious and related transactions.
It is essential to consider compliance as a consideration in product development. It is not advised to develop a platform without deciding on how AML policies will be applied. This could result in costly redesigns and delays.
Capital Depends on the Services You Select
Another reason is regulatory capital. to define the business model before.
According to the thresholds in the materials used for the source, kiosks as well as exchanges require 150 000 GEL. Management of platforms for trading needs 350,000 GEL whereas other covered services require only 250,000 GEL. If a variety of services are available the threshold that’s most applicable is the one that is.
This is different from regular capital investment or operating capital. The evidence that the amount was actually paid for must accompany the application, and the capital needs to be maintained throughout operations.
An entrepreneur who is planning to apply for a cryptocurrency blockchain certification in Georgia should consequently consider the possibility of regulatory capital in financial planning not until the rest of the application has been completed.
Registration isn’t the only aspect of compliance work
The calendar of compliance doesn’t expire with the approval. The requirements provided outline ongoing obligations involving cybersecurity, risk management technology fraud risk, recording retention, independent review and customer complaints.
For example an independent auditor’s report regarding the risk-management system must be sought within 12 months from the time of registration. The described complaint-handling rules also require companies to accept complaints in written, oral or electronic formats and then review them within a maximum of one month, and provide information about complaints electronically to the National Bank each month.
The details of these changes affect how a serious applicant should approach licensing.
Imagine an Georgian VASP Application to represent the layout of a controlled business.
The structure of the company, its service model technology, AML controls, regulatory capital procedures for risk, the company’s structure, and processes for customers must all be able to work together.
Georgia offers opportunities to businesses in the field of fintech and crypto and the legal framework provides an open path to entering the market. However, asking about the speed at which you can receive a license is not the best way to begin.
It’s describing, in precise terms, what your company’s crypto operations will do and demonstrating that the company is prepared to carry out the work within the Georgian regulatory framework.