It’s not accurate enough to describe a regulatory application as “We’re the first to launch our crypto platform”.
Can users exchange crypto to fiat currencies? The platform will be able to move virtual assets? Will the company control client wallets or private keys? Does it plan to administer the trading platform or lend against digital assets?
The differences in these two areas are crucial when you seek the crypto license in Georgia because the services a company is planning to provide influence its regulatory preparation, documentation, controls, and capital requirements.
Georgia offers a market that is regulated for virtual assets that attracts fintech companies. However, gaining access to this market takes more effort than simply registering your company and then launching your website.
Defining the scope of service
Businesses offering virtual asset services to third parties according to the model described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
Within the scope are the activities of virtual transfer and exchange of assets and the administration of trading platforms as well as custody or management of cryptocurrency. According to the regulatory information supplied, the custody concept includes administration of the customer’s private keys and wallet.
This creates the need for a crypto-product relevant 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 the client makes a deposit of their funds? Who owns the wallet? Can assets be traded or transferred? Who can authorize transactions?
It is important to know what the company will actually be doing.
Your Business Plan Should Describe the Real Business
VASP applications require more than a beautiful pitch deck.
The National Bank will expect a detailed business proposal that includes financial projections for at least three years. This should include income, expenses and growth assumptions. The plan must also prove genuine intent to operate in Georgia.
That requirement deserves attention early.
A business plan for investors will address questions like: How quickly can the business grow? The business plan of an operation that is regulated must contain information about how it will run in a responsible manner.
Businesses that seek vasp Georgia license should be prepared to link the commercial model and the compliance model, rather than treating the documents as separate documents.
AML Cannot Be Added at the end
Anti-Money Laundering and Counter-Terrorism Controls on financing are among the most substantial parts of the plan described by PB Services.
The information provided specifically warns against importing a law regarding AML from a different country because Georgian laws must be integrated into the structure of the company.
Additionally, the operational systems are important. Business plans must show that the company’s system can detect similar and suspicious transactions from the outset.
Practically, the quality of a product must influence its development before it is launched. Building a platform first and seeking out what AML procedures fit in the future could result in unnecessary rework and lead to delays.
Capital is contingent on the Services You Choose
Capital for regulatory purposes is another reason to establish the business model before.
In accordance with the guidelines in the source material Exchange and transfer 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 a variety of services are available the threshold that is most affluent applies.
This is distinct from normal capital investment or operating capital. A proof that the amount has actually been funded must accompany the application, and the capital should be maintained throughout operations.
The founder that wants to obtain a crypto-blockchain license in Georgia should consider the regulatory capital in his budgeting and not wait until the rest is completed.
Registration isn’t the end of compliance process.
The compliance calendar will not disappear with the date of approval. The requirements provided outline continuous obligations pertaining to cybersecurity, risk management technological resilience and fraud risk, as well as record retention, independent review as well as customer complaints.
For example an opinion of an independent auditor on the risk-management framework must be obtained within 12 months after registration. In accordance with the regulations, businesses must accept complaints either written or verbally and examine them within a month. They also have to send statistics of complaints to the National Bank electronically each month.
These particulars affect the manner serious applicants should be approached when seeking licensing.
Imagine the Georgian VASP as a visual design for a company rather than a set of forms that need to be filled out.
It is important that the corporate structure as well as the technology used, AML controls and regulatory capital, along with the customer’s processes are in harmony.
Georgia is a good place for fintech and crypto businesses. The framework for regulation provides an easily-defined route to the market. The best place to start isn’t asking how quickly the license will be granted.
You should be able to describe in detail what your crypto-business’s goals are and show that you are prepared to comply with Georgia’s regulations.
