“We’re in the process of launching a crypto-based platform” isn’t the most precise description for a regulatory application.

Can customers convert cryptocurrency to fiat? Will the platform be able to transfer virtual assets? Will the company control client wallets or private keys? Does it manage the trading platform, lending against digital assets or thinking of releasing tokens?

These distinctions are crucial when applying for an crypto-license in Georgia due to the services a company plans to provide will impact its regulatory requirements, documentation, control, and capital requirements.

Georgia is an ideal place for fintech firms, but to be able to access its controlled virtual asset market is more than just registering a company and creating a site.

Definition of the service

Businesses providing virtual-assets services for third parties must be registered as Virtual Asset Service Providers at the National Bank of Georgia under the structure described by PB Services.

The scope includes the activities of virtual asset exchange and transfer as well as managing trading platforms and custody management for cryptocurrency. It is important to note that the provided regulations state that the custody concept is also applicable to managing a client’s private account or key.

This is what makes the design of an crypto-product important to its regulation status.

A founder interested to obtain the crypto licence in Georgia should sketch out the customer journey proposed before making the request. What happens after a client deposit funds? Who is the person who controls the account? Assets can they be transferred or exchanged? Which party is authorized to authorize transactions?

Answers that are specific and clear can help decide what the business will be doing.

Your Business Plan Needs to provide a realistic description of your business

VASP applications require more than a beautiful pitch deck.

According to the information provided in the report, the National Bank requires a detailed plan of operation that includes financial projections for an minimum of three years. This includes revenue, expense, and expansion expectations. The plan must also prove the intention to be operational within Georgia.

This is a need which must be addressed as soon as possible.

A business plan that is written to be used by investors will answer concerns like: How fast will the company expand? The business plan for regulatory compliance should explain how the business will operate responsibly.

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 able to be added at the conclusion

Anti-Money Laundering and Counter-Terrorism Financing control is among the most substantial parts of the plan as described by PB Services.

The document specifically warns against simply importing a policy regarding AML from a different country because Georgian AML regulations must be integrated into the framework of a business.

It is equally important to look at the operational systems. The business plan needs to be able to demonstrate that the business’s system can recognize any suspicious transactions.

Compliance must be a consideration in product development. By creating a platform, then determining how AML will work and how it will work, you could cause unnecessary delays and redesign.

Capital is contingent on the services you select

Capital for regulatory purposes is another reason to define the business model before.

As per the thresholds listed in the documents, kiosks and exchanges require 150 000 GEL. Trading-platform management requires 350,000 GEL however other covered services need only 250,000 GEL. The most stringent thresholds apply when a variety of services are offered.

It is not the same as ordinary operating capital. The proof that the amount requested is actually paid for must accompany the request, and the capital has to be maintained all through the operation.

A business owner who intends to apply for a crypto blockchain license in Georgia is required to think about regulatory capital in the course of financial planning, not after the rest of the application is complete.

Registration is not the end of compliance work

The compliance calendar doesn’t end with approval. The required requirements outline ongoing obligations in cybersecurity and risk management, technology resilience, fraud risk as well as records retention, independent review and customer complaints.

A risk-management system, for example, will require an opinion by an independent auditor within one months of its registration. The described complaint-handling rules also require businesses to accept complaints in written, oral or electronically and review them within a maximum of one month, and send data on complaints electronically to National Bank each month.

These aspects affect the way serious applicants should apply for licensing.

Imagine the Georgian VASP Application to represent the layout of a controlled business.

It is important that the structure of the company along with the technology, AML controls and regulatory capital, in addition to customer processes, are all in perfect alignment.

Georgia continues to provide opportunities for fintech and crypto businesses, and its regulation framework gives businesses a clearly defined route into the market. The best way to begin is not by asking whether a license will be granted.

It is being able, in specific terms, to detail what your crypto company plans to do and to demonstrate that the company will be operating in accordance with the Georgian legal framework.