The application for regulatory approval should not contain the words “We are in the process of launching a cryptocurrency platform”.
Will customers exchange cryptocurrency to fiat? The platform will allow the transfer of virtual assets? The company will be able to control clients’ wallets and private keys? Are they administering a lending platform for digital assets and issuing tokens, or overseeing a trading system?
These differences are important when seeking a crypto license in Georgia due to the services that a company intends to provide affect its regulatory preparation and documentation, controls as well as capital requirements.
Georgia is an ideal location for fintech firms, but to be able to access its controlled virtual asset market, you need more than just registering your business and creating a website.
First, you need to define the service.
Under the framework described by PB Services, businesses providing covered services in the field of virtual assets for third parties need to be registered as Virtual Asset Service Providers (ASP) with the National Bank of Georgia.
This includes virtual-asset transfer and exchange, the administration of trading platforms, as well as management or custody of cryptocurrency. It is important to note that the provided regulation states that the concept of custody also applies to the management of a user’s private key or 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 when a customer deposits funds? Who controls the wallet? Can assets be exchanged or transferred? Which party is authorized to authorize transactions?
Answers that are specific and precise help to determine what the company is doing.
Your Business Plan Must Describe a Real Business
VASP applications also require more than just a gorgeous pitch deck.
The National Bank will expect a thorough business plan with financial projections for minimum three years. This must include revenues, expenses and growth expectations. The plan should also show an actual intention to conduct business within Georgia.
It is vital to address this issue as soon as you can.
A business model written for investors answers questions about how quickly the company will grow. A regulation-based business plan should provide a clear explanation of how the company will be conducted in a responsible manner.
Georgian applicants for a vasp license shouldn’t view the commercial model as if it was not related. Instead they should join them.
AML cannot be added at the conclusion
PB Services has described the preparation process as an important element of the controls against money laundering and terrorist financing.
The material is specifically cautioned against importing a law on AML from a different country because Georgian AML regulations must be integrated into the overall framework of the company.
The operational systems are important too. The business plan needs to be able to demonstrate that the business’s system is able to identify potentially suspicious and related transactions.
In practice it is essential that compliance be a factor in the design of a product prior to launch. By building a platform and then determining the way AML can be implemented, you can cause unnecessary delays and even redesign.
Capital is contingent on the Services You Choose
Regulatory capital is another reason to establish the business model early.
In accordance with the guidelines in the source material, transfer and exchange, as well as kiosks must be at the minimum of 150,000 GEL. Trading platform administration requires 350,000 GEL, while other covered services need 250,000 GEL. The highest threshold is required when multiple services are provided.
This is different from operating capital or capital investment. The application should be accompanied by evidence that the amount required is financed.
Anyone who wants to get a crypto blockchain license in Georgia should consequently consider regulatory capital when planning financial plans not before the rest of the application has been assembled.
Registration doesn’t complete the compliance Work
Approval is not the point when the compliance calendar goes away. The requirements include ongoing obligations related to cybersecurity, risk management and technological resilience. They also include record retention, independent reviews customers’ complaints, records retention.
In order to receive an audit-free opinion from an independent source on the risk management framework A company must sign up within twelve months. The rules for handling complaints require businesses to accept complaints in oral, written, or electronic form and evaluate them within a time limit of a month, and send complaint statistics electronically to the National Bank each month.
These factors affect the way an applicant who is serious should approach licensing.
Imagine a Georgian VASP Application to represent the layout of a controlled business.
It is crucial that the structure of the company along with the technology, AML controls and regulatory capital, as well as the customer’s processes are in perfect harmony.
Georgia has opportunities for crypto and fintech companies, and the regulatory framework gives a straightforward path to the market. However, the best starting point isn’t determining how quickly a license can be obtained.
It’s about being able to describe precisely what your crypto business will perform and showing that the business is ready to carry out the work within Georgia’s regulatory framework.